New Zealand – Extension of the 90-day trial period to all employers

What’s new?

The Government recently announced that it will be extending the option of a 90-day trial period to all employers in New Zealand (subject to exclusions for a limited category of employers who are approved by the Government to recruit overseas workers for certain positions). Currently a 90-day trial period is only available to employers with less than 20 employees. The change is expected to come into effect before 25 December 2023.

What is a 90-day trial period?

This is a clause which employers can include in a new employee’s contract, whereby for up to a specified period of 90-days, an employer may dismiss an employee and that employee is not entitled to raise a grievance in relation to that dismissal. To be valid, the 90-day period clause must be in writing, in an Employment Agreement, which is signed prior to the employee commencing work.

In the case of a dismissal, employers are still required to act in good faith, such as providing employees with relevant information and giving them an opportunity to comment. In addition, the inclusion of this clause does not override an employee’s right to bring a personal grievance where they deem that they were at an unjustified disadvantage by reason of bullying, harassment, or discrimination.

So, what should employers do now?

Employers should review their internal processes and polices and decide whether they wish to include a 90-day trial period, including amending any template employment contracts. If you need any support with this, or would like any further information, please get in touch with a member of the MDR ONE team.

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