No such thing as an unpaid trial

Employers keep getting trial periods wrong and it keeps costing them money. Biform Limited found this out recently when they were found to have unjustifiably dismissed W after he had worked two trial half-days. It cost them nearly $4000.00 (not including legal costs)

Biform is a small Onehunga company that imports and distributes composite decking made from recycled plastic and timber waste. As the decking is heavy the company holds trials to make sure employees can handle the work. So far so good. Biform’s practise however, was to only offer a written employment agreement once a trial period was satisfactorily undertaken.

It did not view the people on short trials as employees. It was wrong.

W worked two half days. After those two half days Biform said it had decided not to employ him because he spent too much time on his phone including taking selfies on the forklift. However, Biform had already employed W. As soon as he started work on the first day he was an employee.

If Biform had given W a written employment agreement with a 90 day trial period then there would be no problem. However, it did not. Because it did not give him an agreement before he started work tit was held to unjustifiably dismiss W.

If Biform had followed proper procedures and given him the written agreement it could have dismissed W during the trial period and he would have been unable to raise a personal grievance for unjustified dismissal.

Employers need to be aware that not following the proper procedures can be costly. This case is a timely reminder for employers who want to use trial periods that they need to provide the relevant people with a written employment agreement before they start work, which contains an appropriate trial period clause.

Only businesses with 19 employees or fewer can use trial periods, which can be any period up to 90 days, and it starts when the person begins working. This allows an employer to lawfully end the employment during the trial period without having to give a reason. An individual, who works past the trial period without being dismissed, automatically keeps his or her job. If the individual has worked for the employer before, they cannot be put on a trial period.

It is vital that employers get their paperwork right. If you need advice on your current employment agreements or any advice at all on employment, give one of our team a call.