Commercial & Business, Employment & Health and Safety, Insights

Are 90 Day Trial Periods Right for You?

90 day trial periods can be very useful tools as they allow employers to find out whether an employee is right for a role. During a trial period, an employer can dismiss an employee and the employee cannot raise a personal grievance for unjustified dismissal, so long as the trial period is valid. However, trial periods are often challenged, so it’s essential that an employer understands what trial periods are, what they are not, and how they should be used in order to determine whether or not they are right for their business.

An employer can include a 90 day trial period in an employment agreement if the company has less than 20 employees. This number includes all casual, part-time and fixed-term employees. The number applies to when the new employee starts. So if an offer of employment is made when the company has less than 20 employees and then later on increases its staff to above 20 employees, the trial period will still be valid. However, if the above-threshold employees start work before or on the same day as the trial period employee, then the trial period will be invalid.

It’s important to understand what trial periods are not. They are not a licence to dismiss employees immediately, or a viable alternative arrangement for temporary employment. Trial periods cannot be longer than 90 days, and written notice of termination must still be given within the 90 days if they wish to end the employment in reliance on the trial period clause.

Because of the significant imbalance of power that trial periods create, the courts interpret trial periods strictly. Here a few of the main conditions that employers need to meet in order for a trial period to be upheld as valid:

  • The employment agreement must specify when the trial period commences and how long it will be for
  • The employment agreement containing the trial period clause must be signed by both the employer and the employee before the employee commences work
  • The employee must be a new employee and not have worked for the employer previously
  • Written notice of termination must still be given within the trial period even if the dismissal date occurs outside of the trial period
  • The written notice should specify the trial period clause being relied upon and state if the employee is required to work their notice

If these conditions (among others) are not met in the use of a trial period then the trial may be ruled invalid and the employee will likely have a valid personal grievance.

If you would like some advice on whether or how a trial period could made be suitable for you, please get in touch.