Trial and probationary periods - know the difference

It’s unfortunate but all too common: small employers continue to make mistakes that cost them dearly.

A recent case saw a Mr L. start working for a couple that were running a bee keeping business. The couple believed they employed Mr L. as a trainee bee keeper but Mr L. said he was employed as a labourer. After nine weeks the couple dismissed Mr L. on the basis that he was unsuitable to work as a bee keeper. Just like that.

No valid trial period

The employer initially advised the Authority that they had dismissed Mr L. under a 90 day trial period. However, they ended up conceding in the Authority that Mr L. was not subject to a valid trial period because they failed to meet the strict requirements of the Act. I have spoken about this before because trial periods can be tricky to get right, and it can cause huge problems when they go wrong.

Requirements for a valid trial period

Before a 90 day trial period will be valid a number of things have to be proved by the employer, namely:

1. That the employee had not worked in any capacity for the employer before signing the agreement for a 90 day trial (that includes if someone starts work on Monday and only signs the agreement on Wednesday – that completely invalidates the 90 day trial period).

2. The 90 day trial period agreement was recorded in writing.

After conceding the 90 day trial point the employer then argued (and I cannot work out how they thought this argument a winner) that the employee was not subject to a probationary period.

What is a probationary period?

A probationary period can be used for people who have already worked for an employer. Unlike the 90 day trial period, it does not stop an employee taking a claim for unjustified dismissal if they are dismissed during the probationary period but it does give some room for maneuver by an employer in relation to procedure.

In a nutshell it is easier to dismiss someone during a probationary period than if they are permanent.

Mr L. said he did not know he was on a probationary period, there was no written agreement and that he had left a permanent job to come to this role and would not have done so if he had thought he was on a probationary term.

Employer failed on all counts

In deciding this matter the Authority concluded that Mr L. did not have a written employment agreement and he was not subject to either a trial period or a probationary period. Mr L.’s dismissal was carried out with a complete lack of any process, resulting of course from the employer’s misunderstanding that they had a valid trial period provision which would enable them to dismiss Mr L. within 90 days of him starting employment.

The ERA said that this case should serve as a warning to employers to ensure their employment documentation is in order before a prospective employee accepts an offer of employment.

Mr L. lost $4,989.60 and was awarded that lost remuneration. He was awarded a further $3,000.00 for stress compensation.

Contribution of employee

The Authority then considered contribution and was satisfied that on the balance of probabilities Mr L. engaged in blameworthy conduct which contributed to the employer concluding he was unsuitable for the job. Accordingly the ERA assessed that there should be a 50% reduction in the remedies awarded.

Even so, had the employer had its paperwork in order before employing Mr L. it would have in all probability meant that Mr L. had no personal grievance whatsoever. Another costly lesson learnt.