Here’s yet another way a trial period can go wrong.
In a recent case before the Employment Relations Authority, an employer had done seemingly everything required to comply with the 90-day trial period law:
- they included a trial period clause in the agreements;
- they ensured that the agreements were fairly bargained for; and
- they made the employee sign the agreement before they started work.
All well and good so far, you might think. But still, the trial period was held to be unenforceable in this case.
The reason? The trial period did not have a start date.
A TRIAL PERIOD THAT NEVER STARTED
The issue boiled down to how the 90-day trial period clause was drafted. It began began like this:
“A trial period will apply for a period of ninety (90) days (“the Trial Period”) under s.67A Employment Relations Act 2000, to assess and confirm the suitability of the Employee for the position. …”
The law states that the only time a trial period can apply is for the first 90 days of the employee’s employment.
The problem with the above clause was that it did not say when the trial period would begin to apply.
The Authority took the view that as a result of that wording, there was uncertainty about when the parties might have agreed the trial period would commence.
For example, the parties might have agreed the trial period would only commence after pre-employment training or induction, and once the employee had begun to do the work they were really hired to do.
But because the trial period can only commence from the time the employment commences, the Authority said the trial period clause could possibly be inconsistent with the law if it was intended that the trial period start at some other time than the law permitted.
This uncertainty led the Authority to decline to enforce the trial period.
That result may seem harsh. Common sense would suggest the parties must have intended the trial period to begin to apply when the employee started to work, even if that was not expressly stated.
Nevertheless, it is consistent with the sort of approach that the Authority and the Court are taking with respect to interpreting trial period clauses in a very narrow and strict way.
TRIAL PERIOD CLAUSES ARE INTERPRETED STRICTLY
When the Government introduced 90-day trial periods, they promoted them as a way to reduce risk for employers. Unfortunately, such as in this case, they are proving to catchmany employers out.
This is because the Employment Relations Authority and Employment Court are applying a very strict approach to the way the law is interpreted.
They are doing so to ensure that employee rights to raise a personal grievance are not unduly eroded.
The cases to date have made clear that trial period clauses will not work if they:
- are not fairly bargained for;
- are imposed on an employee who has worked for you before;
- are not included in a written employment agreement;
- don’t specify the maximum period of the trial period of no more than 90 days;
- don’t specify that the employee may be dismissed on notice during the trial period, which will prevent them from taking a claim in relation to their dismissal; or
- are not in an employment agreement signed by the employee before they start work.
Now we have another to add to the above list of reasons why trial periods fail: not having a start date to your trial period will also invalidate your clause.
To avoid the trap highlighted by this most recent case, here is some suggested wording for your trial period clause that specifies the starting date:
“Starting on the commencement date of the Employee’s employment, the Employee will serve a trial period of 90 days in accordance with sections 67A and 67B of the Employment Relations Act 2000 …
During the trial period, the Employer may terminate the Employee’s employment by giving one week’s notice (whether or not that notice period concludes during or after the trial period). If the Employer does give notice of termination of the Employee’s employment during the trial period, the Employee will not be entitled to bring a personal grievance or other legal proceedings in respect of that termination.”
We continue to see cases where employers rely on trial periods to dismiss employees, only later to discover that the trial period was unenforceable.
In that situation, you can be greatly exposed to a risk that you have dismissed your employee unjustifiably.
To ensure your trial period is enforceable, you need to not only have a robust trial period clause that includes a start date, but also a checklist as part of your procedures for hiring staff.
For more, have a look at this guide to everything you need to know about trial periods, and these checklists for hiring and firing employees under 90-day trial periods.