Badly drafted 90-day trial clause costs employer $10,000…

An employer included a 90-day trial period in their employment agreements but did not get the strict legal requirements correct.  They then fired the employee for poor customer service within the 90-day period.

A valid 90-day trial period allows an employer to fire an employee within the first 90 days of employment without reason.  The employee may not raise a personal grievance for the dismissal.

However, it is crucial that the employer complies with strict legal requirements otherwise any dismissal using the trial period provision may be challenged by the employee.

The employee raised a personal grievance.

The Employment Relations Authority held that the clause was defective and could not be relied upon by the employer because:

• The clause did not provide a statement that explained the provisions of the Act as required.
• In the Agreement there was a “yes” and “no” operative provision for the trial clause.  Neither had been ticked.

Because the 90 day trial period provision did not apply the employer was required to act reasonably and fairly.

The employer failed to act reasonably and fairly because they had relied on the 90 day period clause, and failed to follow any process in regard to the dismissal.  There was:

• No investigation into the complaint before the dismissal.
• No raising of the allegation with the employee.
• No reasonable opportunity to respond/comment.
• No discussion on any penalty.
• No consideration of any explanation from the employee before the dismissal.

As a result the dismissal was unjustified and the employee was awarded over $10,000 lost wages and compensation.

If you need assistance drafting your trial period clauses or your employment agreements give me a call on (04) 4736850.

Alan Knowsley

A failure to keep notes leads to finding of poor disciplinary process…

In a recent Employment Court decision, following a personal grievance for unjustified dismissal, the Judge found that the employer’s disciplinary process was below standard…

In part this was because the managers involved in the disciplinary meeting failed to keep any notes of what the employee said in response to the allegations raised with her.

It is important to keep good notes of what the employee says so that the employer can be seen to have listened to what has been said and taken it in (even if what was said was not accepted).

A lack of notes means the ERA or Court has no contemporaneous record of what was said.  In this case the employee admitted serious wrong doing so a note of that would be really helpful to justify the employer’s decision.

In this case the employee’s behaviour was so illegal she was found to have been justifiably dismissed and so got no remedies for the poor process.  However, in the normal case you should not risk it.  Write it down.

If you need assistance with handling a disciplinary process give me a call on (04) 473 6850.

Alan Knowsley

Dismissal following failed drug tests results in five months lost wages and damages for employees…

An employer was ordered by the Employment Court in a recent decision to pay two sacked employees up to five months lost wages plus damages (over $6,000) for unjustified dismissal and personal grievances.  They were fired after each failing a second drugs test, and they had agreed to a tough anti-drugs policy.

How did the employer get this process so wrong?

The employer had implemented a detailed anti-drugs policy.  The problem was that they failed to follow the policy, in that:

(1)  The policy specified a second failed test after rehabilitation could result in dismissal – but the second tests for both employees were taken during rehabilitation, in breach of the policy.

(2)  The policy specified that testing could be done “for cause” if two people witnessed the behavior and suspected drug use – only one person saw the incidents, and so the policy was breached.

(3)  The policy stated that the drug use had to impact on work and safety – one of the employees was smelt with cannabis at a non-work social event when he was off work for an extended period.  It could not have impacted on his work or safety.

These breaches of the policy meant that there was no basis for the second drugs test (both having failed correctly applied first tests), and therefore dismissals based on the second tests were unjustified.

If you need help drafting or implementing drug and alcohol policies call me on 04 473 6850,

or email me at aknowsley@raineycollins.co.nz

Alan Knowsley

Failure to have signed Employment Agreement causes huge disruption…

In a recent dispute an employee refused to sign an employment agreement provided to her after she commenced work.

The employee had worked for the employer before on a fixed term agreement.  She was then taken back on for an agreed fixed term, but no employment agreement was signed before she started. 

She then refused to sign the new fixed term agreement, claiming she was offered a permanent position.  To avoid an argument the employer offered the employee a permanent agreement on the same terms as previously (apart from the duration), but the employee refused to sign any agreement and failed to detail what it was she disagreed with in the agreement.

The employee has a duty to be communicative, but the employer will be put to the huge disruption and costs of an Employment Relations Authority hearing, to determine the terms of the “agreement”, as the employee is employed, but will not agree on any terms beyond those required by law.  She will not even agree to the terms she agreed to in her prior employment.

The lesson from this is that no employer should allow any employee to commence work unless the employment agreement has already been signed and returned to the employer.

If you need help getting your employment agreement process right give me a call on

(04) 473 6850.

Alan Knowsley