A recent Employment Relations Authority (ERA) decision highlights the importance of ensuring trial period provisions fully comply with the Employment Relations Act. Any errors, even minor ones, can invalidate a trial period and expose an employer to personal grievance claims.
Mr Singh was employed by Pilling & Leggett Engineering Co Ltd (P&L) as a CNC machinist under an individual employment agreement signed on 13 July 2023. The agreement, which included a 90-day trial period, stated his employment would begin on 31 July 2023.
After about a month, P&L raised concerns about Mr Singh’s performance. On 30 August 2023, his manager advised him that his employment would be ending, citing a lack of improvement. A written termination letter followed the next morning by email. Mr Singh subsequently raised a personal grievance, claiming the trial period clause was invalid.
The ERA found that while Mr Singh had signed his agreement before starting work, several issues rendered the trial clause ineffective. The clause itself contained an incorrect reference to a non-existent section of the Employment Relations Act, and P&L had not clearly advised Mr Singh of his right to seek independent legal advice before signing.
The Authority also noted that, although P&L allowed Mr Singh time to consider the agreement, merely suggesting he “talk to his wife” did not meet the requirement to advise him to seek truly independent advice. In addition, written notice of termination was not provided at the time the dismissal was communicated, as required by the agreement.
Because of these procedural failures, the ERA determined that the trial period was invalid. Without the protection of a valid trial period, P&L’s actions were assessed under normal dismissal principles and found to be both substantively and procedurally unjustified.
The ERA awarded Mr Singh $15,000 in compensation for humiliation, loss of dignity and injury to feelings, plus $1,760 in lost wages.
This case is a reminder that trial periods must be meticulously drafted and applied.
To stay compliant and avoid costly mistakes:
Check that your trial period clause correctly references section 67A of the Employment Relations Act.
Make sure the employee has signed and returned the agreement before starting work.
Clearly advise the employee of their right to seek independent legal advice — and record that you’ve done so.
Provide written notice of termination at the time the decision is communicated.
Even with a 90-day trial period, the ERA expects employers to act fairly and follow proper process.
Navigating abandonment of employment issues requires care and a sound understanding of your obligations. Our HR Advisory team can help you apply best practice and minimise risk. 👉 Contact Michael at michaelp@cecc.org.nz for tailored support.