Including a trial period in your employment agreements can protect you from hiring an employee who mightn’t have the right skills or attitude. However, it is important to use them correctly.
Discover what you need to know about trial and probation periods.
You have to:
If you decide to dismiss the employee within the trial period:
Mark’s plumbing business has five employees and is now so busy he needs an extra pair of hands. He hires Jim, a qualified plumber, with a 90-day trial period clause in his employment agreement. He can do this because he has 19 or fewer employees. After a month, it’s clear Jim is habitually late and his work is sub-standard.
Mark asks what’s up – an important step in resolving the issue, as perhaps Jim doesn’t have the right tools. Jim doesn’t have an explanation so Mark gives him a warning. He records the meeting in Jim’s file and arranges a follow-up meeting.
A week later, Jim’s conduct has worsened. Mark checks the employment agreement and sees he must give two weeks’ notice of dismissal. He notifies Jim, and offers to pay him out instead. Jim agrees and Mark goes through his employee exit checklist.
Find out what you know about hiring and managing people.
A probation period is different from a trial period.
A probation period is:
You have to:
If you decide to dismiss the employee during the probation period:
If the reason is connected to the probation, it must be because the employee isn’t performing to the expected standard in the agreed time. You must have given support and training for this to be a valid reason.
This is prohibited. To hire an employee on a fixed-term contract, there must be a genuine reason for the job to only last a certain period of time — like seasonal work or cover for parental leave. Read more about fixed-term contracts.
If there’s a problem during a trial or probation period, you and your employee can get help from Employment Mediation Services. Their service is free, private and confidential. They can help you:
Mediation can be:
Trial and probationary periods (external link) — Employment New Zealand
Employment Mediation Services (external link) — Employment New Zealand