The Return of 90-Day Trial Periods for Employees
Written by Sophie Broome
Updated: 19 January 2024
90-day trial periods for all employees have been reintroduced by the government effective from the 23 December 2023. This change is in addition to other employment law reforms including the Fair Pay Agreements Act Repeal Act which came into force on 20 December 2023.
A key benefit of a 90-day trial for employers is the potential to decrease costs. Recruiting and onboarding new employees costs time and money to a business of any size, and it is in the best interest of employers to find the person best fit for a role. Although this change may sound risky for employees, Treasury found no evidence in 2016 that trial periods disadvantage employees.
During the 90-day trial, an employer must act in good faith. From the outset, the trial period must be discussed and agreed by both parties and signed by the employee in their employment agreement before they begin work. The employment agreement must ensure the employee has a clear understanding they cannot pursue a personal grievance for unjustified dismissal if the employer provides the correct notice. We recommend that the 90-day trial period is also outlined in the initial letter of offer to an employee to provide further clarity.
It is important to note that the addition of a 90-day trial clause to an employment agreement does not affect other employment relations matters, such as worker protection regarding pay, working conditions, leave and Health and Safety.
If hiring of new employees is managed correctly, and transparently, employers should avoid any disputes down the track.
Our Director, Christine Symes, can answer any questions you may have and may also conduct a review of your current employment agreement template to include this recent development. Christine can be contacted on [email protected].