An Update On The 90 Day Employment Trial Period From Fortune Manning

Trials and tribulations – and update on 90 day trial periods. If you are considering employing new staff in 2013, be careful when using trial periods. Fortune Manning last wrote about the fraught 90 day trial period after the Stokes Valley Pharmacy case where Heather Smith was told by her new employer “not to worry” about the 90 day trial period in her new employment agreement. It turned out that the employer was the one with the worries when the Employment Court found that the trial period was not valid because Ms Smith signed her agreement one day after she began work, making her an existing employee (trial periods only being applicable to new employees).

Intending to Work – The Court has continued to apply the law relating to trial periods very strictly. In Blackmore v Honick Properties Mr Blackmore started work on a farm at 7am and was given an agreement to sign at 8am. He was not given the opportunity to seek legal advice on the agreement, or really negotiate the terms at all. The “one hour” was in fact a little more than that: Mr Blackmore had accepted the offer of employment the month before starting.

The Act defines an employee as someone “intending to work”, so once a person accepts an offer of employment they have already become an employee even if they do not start work until sometime later. The Court did comment that, at the very latest, if Mr Blackmore’s employment began at 7am on his start date, he still became employed prior to entering into the individual employment agreement at 8am.

An Unfair Bargain? The Court in Blackmore was also critical of what was seen as unfair bargaining by the employer. Section 63A(2)  of the Employment Relations Act requires the employer to provide a copy of the intended agreement under discussion, to advise of the right to seek independent advice and give the employee a reasonable opportunity to seek that advice; then to consider any issues that the employee raises and respond to them. The Court held that these requirements were breached, although further consideration was not necessary as the trial period was held not to apply and no penalty was awarded.

More Unfair bargaining – The overlay of the fair bargaining requirements on the negotiation of a trial period was reviewed by the Employment Relations Authority late last year in the case of Allan v Mobile Shop Limited & Suny Management Limited. The facts give fascinating insight into an employer that considered itself above employment law. Mr Allan was running his own recruitment business when he was offered employment by Mr Sun (as it transpired on behalf of two companies on a joint and several basis) as National Sales Manager. The offer of employment was made, after a series of discussions and emailed offer and acceptance, then the purchase of a $45,000 car for Mr Allan’s use at the end of October. An employment agreement containing a 90 trial period was signed on 2 November, but dated the following day, which was found to be Mr Alan’s actual start date.