90 DAY TRIAL PERIOD INTRODUCED
The "90 day trial period" has received plenty of press coverage since it was initially proposed by way of an amendment to the Employment Relations Act. The amendment allows employers who have fewer than 20 employees to terminate the employment of new staff within the first 90 days of employment without fear of a personal grievance for unjustified dismissal; provided the parties have agreed to such a trial period in the employment agreement.
The amendments came into force on 1 March 2009. The date of determining whether the employer has fewer than 20 employees is the date the employment agreement was entered into. The legislation does not specify who is counted as an employee and so, potentially, casual and part-time employees could be counted. The following conditions apply to the trial period.
• It will only apply to employees who have not previously been employed by the employer.
• Both parties must agree to the trial period
• The trial provision must be a written provision in the employment agreement
• The trial period must not exceed 90 days - so it could be for a shorter period than 90 days
• During the trial period the employer may dismiss the employee by giving notice of termination
• The employer must give notice of termination to the employee within the trial period in order to be protected by the trial provision
• If the employee is dismissed they are not entitled to bring a personal grievance or other legal proceedings in respect of the dismissal
• Employees will still be able to bring personal grievance claims for unjustified disadvantage, sexual or racial harassment, discrimination or duress.
In all other respects the employee is to be treated no differently from other employees whose employment agreements do not contain a trial period. The obligation of good faith remains during the trial period with the exception that the employer is not required to consult and to provide information to the employee prior to termination.
Commentators have mixed views on the amendments. Australia and most other OECD countries allow trial periods.
The New Zealand Government has introduced this legislation in an effort to encourage employers to provide employment opportunities to people without financial risk to the employer if the employment relationship does not work out.
In an announcement on 11 December 2008 the Minister of Labour, Hon. Kate Wilkinson, stated that "By lowering the legal risks employers face, they will be more confident in giving people the opportunity to prove themselves" and that "The 90 day trial will provide real opportunities for people at the margins of the labour market".
Given that the trial period must be agreed between employer and employee, those employees who are in demand and have some bargaining power will no doubt attempt to negotiate the removal of the trial period.
Employment problems can take some time to surface so employers will need to be vigilant to ensure they act within the 90 day period.
Restructuring and Redundancy
The current economic climate has led to a number of businesses considering restructuring and this in turn leads to the prospect of redundancy. The legal obligations of an employer to ensure that a redundancy is performed both in a substantively justified manner and in accordance with the required procedure is significant. Even where the legitimacy of the redundancy is not in question a failure to comply with the procedural requirements could render the redundancy unlawful and result in a significant claim by an employee.
In particular employers should consider the following issues:
a) The reasons for the redundancy and the evidence that is available to support it;
b) The selection criteria involved in identifying the employee(s) to be made redundant;
c) The level of redundancy compensation payable;
d) The length of any notice period;
e) The employer's obligation to consult with the employee throughout the process;
f) The support to be given to the employee as part of the redundancy process and through the notice period.
It is our very strong recommendation that in any circumstances where a redundancy is being considered expert legal advice should be sought. Please contact Helen Wendelborn or Michael Robinson of this office should you require assistance in this regard.
Step 2: Identify the business responsible for sending the commercial electronic message and how they can be contacted.
Step 3: Include a functional unsubscribe facility in all commercial electronic messages.
We strongly suggest that you take time to review your business practices. We would be very happy to offer assistance to any clients who may require further advice in order to comply with these new legal requirements.
“I have used Turner Hopkins for my legal services for over eight years. I have always found their level of service excellent and their work to a very high standard. I have used various lawyers at their firm for various businesses I have been involved with and have always had very positive experiences. I would highly recommend them.”
“I can't speak highly enough of Jenny. She got everything done in a timely manner and when my ex-husband threw a spanner in the works at the eleventh hour she got the required documentation to his lawyers and settlement back on track.”
“I have struggled with different legal firms over the years, but over the past few years I have engaged with Turner Hopkins with various requirements from personal relating to wills, family trust, property settlements and contracts through to commercial engagements including employment advice, commercial lease agreements and general legal advice. I have engaged with a number of the people in the firm and always found them professional, punctual in their responses and very sound in the advice provided.”
“Joy, we cannot thank you enough for your help with our purchase! You have been wonderful to deal with and so proactive (and patient with my numerous emails). We will be visiting NZ in April so will make sure we drop in to thank you in person.”
“To Michael Robinson – I wanted to thank you and your colleagues for many years of excellent service to the Bank. You have an outstanding business that has proved to be one of the most reliable and ethical businesses that Collections have dealt with in the almost 9 years I was with the Bank.”