90 day trial – payment in lieu of notice valid…

The Court of Appeal has upheld a decision of the Employment Court that giving notice and paying in lieu of notice during a 90 day trial period was a valid termination and could not be challenged in the Employment Relations Authority or Employment Court.

The employee had been under a 90 day trial period which was valid.  He was given notice before the end of the trial period and was paid four weeks in lieu of working out his notice period.  The employee claimed that that was not valid notice and therefore the termination under the trial period was not valid.

Both the Employment Court and the Court of Appeal were clear that paying in lieu of notice does not invalidate the termination under the trial period.  Payment in lieu of notice in this case was allowed by the employment agreement and therefore it was a valid decision by the employer to pay in lieu of notice and not require the employee to work out the notice period.

If that provision had not been in the employment agreement or the employer had not given the correct notice period (e.g. too short a period) then the termination would have been invalid under the 90 day trial provision.

Alan Knowsley

Employment Lawyer Wellington