The use of probationary periods
By: Anthony Drake
Published: 16/05/2019
On 6 May 2019 the Government scrapped the use of trial periods for employers with more than 20 employees.  However, employers are still entitled to use probationary periods at the beginning of an employment relationship to assess a new employee’s skills or for an employee who is changing jobs with the same employer, but it is important to be aware of the legal obligations they impose.  There are procedural requirements which must be complied with: the probationary period must be recorded in writing in the employment agreement and state that there is a probationary period and how long it will last.  A probationary period can be for any amount of time, but must be for a reasonable length of time, and take into account all the relevant circumstances of the employer, the employee and the job.  A failure to comply with these procedural requirements will mean that the employer cannot rely on a probationary period.

An employee is entitled to assume that if their performance during the probationary period is satisfactory their employment will become permanent.  Therefore, it will be necessary for the employer to justify the dismissal of an employee should the probationary period prove unsatisfactory. During the probationary period the employer must follow a fair process in assessing the employee’s suitability for the job.  This requires the employer to tell the employee if there are any issues with their work and, importantly, if there is a chance that their employment might not be continued after the probationary period ends.  The employee must be told what the issues are and what is expected of them in the job, given support and ongoing training (if necessary), given an opportunity to improve and be told the consequences if the expectations are not met.  If the employer decides that the probationary period is not a success, then the employee must be given fair warning before the end of the probationary period that the employment will then be coming to an end.  The employer must give the employee the notice in their employment agreement.  If the employee is dismissed at the end of the probationary period, they can raise a personal grievance on the ground of unjustified dismissal.

The courts have accepted that there is a distinction between a probationary employee and an ordinary employee and the whole purpose of a probationary period is to enable the employer to assess the suitability of the employee in terms of skills, diligence and personality.  Employers may utilise probationary periods, and during that period the employee must be under notice that their performance may be subject to extra scrutiny.  Any probationary period and assessment of the employee must be a fair one.

If you are considering using probationary periods to assess your new hires or transferring employees in your business, then an important starting point is to have a well drafted probationary clause in your employment agreements.  Your Wynn Williams employment team can assist you in drafting appropriate employment agreements to fit your business needs.
 
Download article in PDF format



Enter security code:
 Security code

Wynn Williams Christchurch
Level 5, Wynn Williams House, 47 Hereford Street, Christchurch 8013, New Zealand.
PO Box 4341, DX WX11179, Christchurch 8140.
+64 3 379 7622
+64 3 379 2467
Wynn Williams Auckland
Level 25, Vero Centre, 48 Shortland Street, Auckland 1010, New Zealand.
PO Box 2401, Shortland Street, Auckland 1140.
+64 9 300 2600
+64 9 300 2609
Top

This page is best viewed in an up-to-date web browser with stylesheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so. The latest version of Firefox, Safari or Google Chrome will work best if you're after a new browser.