Hiring new staff is risky. You never know exactly how they will turn out.
Will they perform to your expectations? Will they cause you endless trouble and frustration because they can’t do the job as you hoped, or don’t listen to your instructions, or just don’t get it?
You can reduce your risk by interviewing candidates thoroughly and checking their references. Nevertheless, candidates can sometimes misrepresent themselves on paper and in interviews (here are some clues that this may be the case).
Sometimes the only way you can really know if a candidate will be able to do the job is to give them a small amount of work and see how they fare.
Ideally, you would do this before offering them employment. This type of pre-employment test is commonly known as a work trial.
A work trial is not to be confused with a 90-day trial period (more on that below), but is intended to be part of the hiring process.
The intent of the work trial is that if the candidate seems able to do the job they have applied for, you will offer them that role.
However, the irony is that by attempting to reduce your risk in this way, you may actually increase it. There are two reasons why that is the case.
EMPLOYED BEFORE YOU KNOW IT
The first reason is that, despite your intentions to test the candidate before offering them employment, the very act of performing a work trial may make them your employee.
How can this be so?
It comes down to the definition of what an employee is. According to the Employment Relations Act 2000, an employee is “any person of any age employed by an employer to do any work for hire or reward under a contract of service.”
This is contrasted with the position of a volunteer, who is defined under the Act as someone who does not expect to be rewarded for the work they perform.
Notice that there is no mention of an employment agreement in the above definitions. While every employment relationship is supposed to be governed by an employment agreement, employment relationships can be formed without one.
The Employment Court has taken these principles to mean that a person will be your employee if they:
- are offered work and accept that offer, even if they do not actually do any work for you; or
- do work that benefits your business and expect to be rewarded for that work.
What about inviting the candidate to observe the workplace?
On the above principles it would be fine for you to invite a candidate into the workplace to merely observe what work goes on, provided:
- you do not offer them any work; and
- they do not lift a finger to help in the work being done.
What might amount to a reward?
Obviously, money is a reward. Nevertheless, a reward could be anything a candidate receives for doing work, such as petrol vouchers or even a salad.
Potentially all job candidates could argue that they expect to be rewarded with an offer of employment.
What happens if they do work that benefits your business?
It is natural for people to think they will be rewarded for performing work.
The upshot is that if your business is assisted, even in a small way, there is a risk they will claim they were employed by you.
If you subsequently do not offer them employment on an ongoing basis, they may claim they were unfairly dismissed.
Cue personal grievance.
FALLING FOUL OF THE 90-DAY TRIAL PERIOD
Let’s say you successfully conduct a work trial. You think the candidate will be able to do the job expected of them, so you offer them employment.
Of course, just to be safe, you include a 90-day trial period clause in the agreement. Even though they seemed fine during the work trial, you want to give yourself the extra protection that the law permits.
The hook here, as I have explained elsewhere, is that 90-day trial periods are not enforceable against anyone who has been previously employed by you.
If the work trial is treated as a period of employment for the reasons already discussed, that means a 90-day trial period cannot hold.
Consequently, if you find the employee’s performance unsatisfactory and dismiss them during the first 90 days (because you assume you are covered by the trial period law), the employee will not be prevented from bringing a claim in respect of their dismissal.
A RECOMMENDED APPROACH
In light of these risks, the safest way to test a candidate’s skills is (perhaps counter-intuitively) offering them employment on a 90-day trial period from the outset.
It is important that you know what the 90-day trial period law requires of you to ensure you benefit from its protections. Provided that you comply with these requirements, the employee cannot bring a claim in respect of their dismissal if you decided during the trial period that they do not live up to your expectations.
Moreover, wouldn’t you prefer a period of up to 90 days rather than a short work trial of a day or less to test whether the prospective employee is eligible?
STILL NOT CONVINCED?
Despite this, if you remain intent on conducting a work trial, here are some steps you can take to minimise your risk (though there are no guarantees you will not still be regarded as having employed the candidate):
- Don’t promise to pay, or actually pay, the candidate anything for the work they perform;
- Don’t promise the candidate they will be offered employment as a result of the work trial; and
- Record your invitation to the candidate to undertake the work trial in writing, and in doing so, confirm that for the period of the trial they will be volunteering their services to the business without expectation of any benefit or guarantee that an offer of employment will result. You may also want to get the candidate to confirm their acceptance of the terms of the trial by signing the invitation.
Pre-employment work trials are riskier than many employers think.
The risk arises because you may not think the people involved are your employees, and:
- either send them on their way without offering them ongoing employment, only to later find they have the right as an employee to claim they have been unjustifiably dismissed; or
- offer them employment, but later dismiss them in reliance on a 90-day trial period clause that is unenforceable.
Given these risks, it is probably better to avoid work trials altogether.
The 90-day trial period law is designed to permit employers to test potential new recruits. Get familiar with what that law requires and give yourself a better chance to see the employee in action over a longer period of time.