The Employment Court has upheld the Employment Relations
Authority in deciding that a nil termination period under a trial provision was
invalid. The 90 day trial provision
provided that the notice of termination could be immediate.
The ERA and the Court both concluded that wording in the Employment
Relations Act of notice of termination means giving advance notice, or a notice
period. It did not mean immediate
termination, which only applies to serious misconduct. The Court held that Parliament would have
said so, if it intended to allow a period of notice to mean immediate
termination, which is really no notice.
This finding was supported by the obligations of good faith and the
acknowledgement of the inequality of power when bargaining and working under a
trial provision.
A trial provision which provided for immediate termination,
therefore did not comply with section 67B(1) and was invalid.
Because a proper process had not been followed for the
employee’s termination, their dismissal was unjustified and the Court upheld
the $15,000 compensation award made by the ERA.
It also upheld the calculation of lost wages, except that wages earned
following termination should have been deducted from the lost wages set by the
ERA.
The Court specifically said it was not making any comment
on whether a short notice period would suffice, for example, one hour or one
day. It left open decisions on those
matters for any future cases on trial provisions which provide for such short
notice.
If employers want to be certain as to the length of notice
required, they should provide either for the same notice period as applies for
any other terminations in the employment agreement or a reasonable period of
notice, for example, at least one week. However,
what is reasonable in the circumstances, will depend on the particular facts in
each case.
Alan
Knowsley
Employment
Lawyer Wellington
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