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New restrictions on availability of 90 day trial periods

By Andrew Steele - 6 Dec 2018

Since 2009 all employers have been free to agree 90 day trial periods for new employees. This allowed those employers to 'try and see' a new employee and, if things did not work, they could dismiss them. The trial period clause precluded the employee from bringing a personal grievance in respect of the dismissal.

Labour signalled early on that although they would not do away with this 'employer right/power', they wished to bar its use by large employers. It was argued that large employers ought to be better resourced to make the right choices when engaging employees and to address employee problems in the traditional way, rather peremptorily dismissing them.

The restriction on which employers may insert 90 day trial periods has been legislated for and will come into effect on 6 May 2019. From this date forward only small-to-medium-sized employers may use such clauses, that is, employers who employ fewer than 20 employees as at the date the new employment agreement is entered into.

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