Donald Trump has made an interesting contribution to global culture. There is his unique hair style, his garish buildings, his rumoured aspirations to become President and, of course, his ‘reality’ TV show, The Apprentice.
The final scene of each Apprentice episode sees Mr Trump thump the table, stare menacingly at some poor participant and bark “you’re fired”. No warnings are required, no notice is given and there is no scope for argument. The decision is final.
In New Zealand, a dismissal of this nature is normally totally unlawful. Employment law requires two fundamentals before a justified dismissal can occur. The first is ‘good cause’. The second is a fair process.
However, in March 2009, the Government introduced statutory ‘trial periods’ of up to 90 days for employers with fewer than 20 employees. If a trial period was included in the employment agreement, the law seemingly allowed an employer to dismiss an employee within the trial period for any reason so long as it was not discriminatory, harassment or in breach of good faith. In those circumstances, the employee had no ability to pursue a personal grievance for unjustified dismissal.
Significantly, from 1 April 2011, amendments to the Employment Relations Act will extend the availability of trial periods to all employers in New Zealand, regardless of size.
However, the Employment Court has recently released its first judgment addressing 90 day trials. That judgment has made it clear that to rely on a 90 day trial requires far more than Mr Trump’s “you’re fired”. Instead, there are a number of factors that will need to be considered before any dismissal can safely occur. The following check list sets these out. It is only when all of these can be answered affirmatively that a trial period will be able to be used safely:
1. Is the 90 day trial period included in the written employment agreement? whether collective or individual
2. Was the employment agreement actually physically signed before the employee started work?
3. Does the trial period state that:
- The employee, for a particular period beginning on the first day of employment, is serving a trial period;
- During this time, the employee may be dismissed; and
- If this occurs, they will have no ability to pursue an unjustified dismissal claim.
4. Is the length of the trial 90 days or less from the commencement of the employment?
5. Has the employee been given the notice period required under the employment agreement?
6. Has this occurred within the duration of the trial period?
7. If the trial period contains a process that must be followed when it is being relied on, has this been followed?
8. Has good faith been followed?
9. If the employee has asked, has the employer provided a reason as to why they have been dismissed?
10. Did the reason for the dismissal have nothing to do with any prohibited grounds of discrimination or harassment?
In the case before the Employment Court, the employer did not meet a number of these requirements. That meant that the trial period could not be relied upon and the dismissal was unjustified.