Dismissing an employee under the trial period

Dismissing an employee under the trial period

Many employers are left stumped when they become the recipients of a personal grievance claim for unjustified dismissal from an employee who was dismissed within their trial period.

A mutual agreement and understanding between the employer and employee does not mean it is valid and safe to dismiss under.

Is the trial period valid?

For a trial period to be valid under s 67A of the Employment Relations Act the employer should:

1. Clearly stipulate the Details of the Trial Period.

The individual employment agreement (“IEA”) should have a trial period clause that states:

A. The employee is on a trial period;

B. Beginning from the commencement of their employment;

C. Lasting the length of 90 days or 60 days (depending on the trial period);

D. Both the employer and employee are subject to a notice period; and

E. The dismissed employee cannot bring a personal grievance or any other legal proceedings against the employer about their dismissal.

2. Be Signed and Dated

The employee must sign and date the IEA before commencing work with the employer. Even a small timing difference can lead to the courts invalidating the trial period. It is recommended to request the employee return a signed copy of the agreement at least one calendar day prior to commencing employment – to avoid any disputes).

3. Be for a New Employee

Under s 67A only new employees of the employer are covered under the trial period i.e. the employee needs to have never performed any prior work for the employer.

4. Be used by a Small Employer

S 67A only allows small employers with 19 or fewer employees at the time the employee signs the agreement to use trial periods.

5. Give the Employee Time to Review

The employer must gives the employee a reasonable opportunity to review the agreement before signing (recommend 3-5 business days).

Is the trial period safe to dismiss under?

When dismissing an employee under the trial period (assuming it is first valid) the employer should:

1. Provide notice of the dismissal within the trial period — the notice period can fall outside of the trial period;

2. Provide the employee with the amount of notice stated in the IEA under the trial period clause; and

3. Advise the employee it is exercising its right under the trial period clause in the IEA to dismiss the employee.


If you would like to discuss your situation further, please get in touch with the Watermark team directly. We are happy to advise you.

Andrea de Stadler