Lighthouse cases warn of 90 day trial hazards

All Collections

Sort By

Lighthouse cases warn of 90 day trial hazards's Tags

Tags related to this article

Lighthouse cases warn of 90 day trial hazards

Published On: 6 September 2016

90 day trial periods can be a useful tool for employers when things are not working out with a new employee. Recent Employment Relations Authority decisions concerning Lighthouse ECE Ltd (Lighthouse) are a reminder that employers need to word trial provisions carefully.

A valid trial provision must be in writing in the employment agreement and state, or be to the effect, that the trial period starts at the beginning of the employee’s employment (s67A Employment Relations Act 2000 (the Act)).

In the Lighthouse cases, the trial provision referred to a trial period “under s.67A” of the Act, which would “apply for a period of 90 calendar days”. It did not explicitly specify when the 90 day period started. Lighthouse dismissed four employees under the trial provision. The employees maintained that Lighthouse could not rely on it, as it did not meet the requirements of the Act.

The employer argued that:

  • It was clear that the parties intended the trial period to begin at the commencement of employment;
  • There was no other date on which the trial period reasonably could start;
  • The statement that the trial period would “apply for a period of 90 calendar days” was to the effect that it stared on the first day of employment;
  • The reference to s67A in the trial provision effectively incorporated the statutory requirement that the trial period start at the beginning of the employment.

Trial provisions are interpreted strictly. As they deprive the employee of the right to bring an unjustified dismissal grievance, the employer has to clearly and specifically meet all of the requirements of s67A.

Here, the Authority found that it could not reasonably be implied that the trial period started on the first day of work. The reference to s67A was not sufficient to advise the employees of when the trial period started or to incorporate the requirement that the trial period start at the beginning of the employment. The employer could not rely on the trial provision as it did not state and/or was not to the effect that the trial period commenced when the employee started work.

Section 67A is prescriptive. Employers should ensure that any 90 day trial provision makes it clear that the trial period commences at the beginning of the employee’s employment.

Beta