The decision of the Employment Relations Authority in a series of cases involving Lighthouse ECE Limited attracted significant attention as it involved a dismissal during a trial period being held to be unjustified. This was because the ERA Member held that the wording of the trial period was deficient and therefore that the employer could not rely on the trial period.
In that case, the trial period clause simply stated “A trial period will apply for a period of ninety (90) days…” While it was stated elsewhere when the employment commenced, the two were not linked and the Authority Member found that the wording of the trial period did not meet the statutory test provided in section 67A(2) of the Employment Relations Act 2000, that a trial period means a written provision in an employment agreement that states or is to the effect that for a specified period not exceeding 90 days, starting at the beginning of the employee’s employment, the employee is to serve a trial period.
The employer argued that the clause was “to the effect that” the trial period applied for 90 days starting at the beginning of the employee’s employment but the Authority disagreed. It found that the wording used did not reasonably imply that the 90 days started on the first day the employee started work for the company.
Some advisers are suggesting that a trial period provision must contain an actual start date. The risk of that approach arises if the employee doesn’t commence (for whatever reason) on the specified start date; does that invalidate the trial period? In our view, a trial period which provides that it commences on the day the employee commences work is sufficient to comply with the legislation and is practical enough to leave open the possibility of an employee’s start date changing at short notice.
This case is a useful reminder that special care must be taken with trial periods and their wording. Their use has serious consequences for employees and the Authority and Court have demonstrated that they will be interpreted narrowly and in favour of the employee where there is any ambiguity.
We’re more than happy to advise if you aren’t sure if the trial period wording your business is using complies, or if you want to make sure you can rely on a trial period.