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Newsflash: Trial Periods

Written by Jim Roberts on September 5th, 2014.

The trials and tribulations of using a trial period are compounding with each new Authority and Court decision.   The latest wrinkle is the recent decision in Hutchison v Canon New Zealand Ltd [2014] NZERA Wellington 72.  In a nutshell, the Authority found that to terminate an employee’s employment in reliance on a trial period, an employer must give notice.  Paying in lieu of notice is not sufficient, even where that is expressly mentioned in the trial period clause. 
 
The Authority’s Determination appears to be out of step with usual contractual principles, and is currently under appeal, but in the meantime, our recommendation is to play it safe, and give the required period of notice, rather than paying in lieu.  
 
We also recommend that before you dismiss an employee on a trial period that you please give us a call.  There are so many boxes to tick and it is so easy to trip up and find yourself (metaphorically at least!) on trial.   
 
Topics: Employment Law
 
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