Trial Periods – Manage Them Well

On 25 January 2018, the Labour Government signalled changes to the law governing trial periods. The changes are yet to pass into law. In the meantime it is business as usual, so I want to run through how you can use the trial period for new employees, under the current legislation.

“90 day trial periods” have been part of the employment landscape since April 2009. At the risk of oversimplifying things, I have two key observations about the 90 day trial period. First, there is never a 100% guarantee that a person will be right for a job. Yes, the odds can be improved significantly by having a robust recruitment process, but there is still the chance that an employee just doesn’t work out. Utilising a trial period can take away some of the risk for you as an employer.

My second observation is this. If an employer is thinking like a “good employer”, then the trial period will generally work out for both employer and employee. This is because a good employer’s philosophy, first and foremost, is they want to hire the employee permanently and see them succeed.

On 25 January 2018, the Labour Government signalled changes to the law governing trial periods. The changes are yet to pass into law. In the meantime it is business as usual, so I want to run through how you can use the trial period for new employees, under the current legislation.

Legal Requirements of Trial Periods
If you’re using a trial period provision with your new employee, you must ensure you meet these legal obligations:
• Act in good faith, with the intention of hiring the employee into a permanent role.
• The trial period must be agreed by the employee and must be written into the employment agreement.
• The agreement must be signed before the employee starts work.
• The trial period can’t be offered to employees who have worked for you before.

Minimise the Risk 
• Use a robust recruitment process. Screen with a critical eye, test their skills, run your background checks, undertake comprehensive references and listen carefully to any issues raised during the process.
• On-board the employee well with on-the-job training, support and coaching. Give the employee feedback and try to address concerns as you go. Don’t save trivial things for a day 90 review – for example, if the employee is always turning up late for work, nip that behaviour in the bud.
• Encourage the employee to be active in their integration into your business and their role.

Exiting an employee under a trial period
Exiting someone under a trial period should be the last measure, not a default position.
• Check that you have met the legislative requirements – agreement signed before starting, etc.
• Give notice to the employee in writing within the trial period.
• Don’t leave it until the bitter end of the trial period. When you know you can’t do any more to make it work, it’s time to act.
• And always treat your employee with dignity.

If an employer acts in good faith, then the trial period will generally work out, because the employer is genuinely looking to make the employment relationship work and will only use the trial period as the last resort.

If you have any questions, we would love to help. Give us a call on 07 823 3250 or email us at info@peopleinmind.co.nz. And, when legislation changes occur, we will keep you posted with what these changes will mean for your business.