The first employment case brought to court under 90-day trial laws has gone in favour of a dismissed employee, prompting the Council of Trade Unions (CTU) to send a warning to employers.

Heather Smith was publicised in the union's "name and shame" campaign after being sacked by Stokes Valley Pharmacy in Hutt Valley.

She had worked there for almost three years, but had to re-apply for her job late last year after the business changed ownership and name, and was sacked a few weeks later.

Backed by the CTU, Ms Smith's case ended up in the Employment Court, which ruled in a decision released today that the new employer had not complied with contractual requirements of the Employment Relations Act relating to the trial period, meaning laws preventing Ms Smith taking a personal grievance case were nullified.

The court also referred to "good faith" expectations and said the employer had not lived up to those in its dismissal of Ms Smith and there were grounds for a personal grievance.

CTU president Helen Kelly said the employer had relied on the law for complete indemnity from standards of decent employment practice, but was found to have breached both good faith requirements and terms in the employment agreement.

Ms Kelly said the decision was a victory for Ms Smith, but the court still made it clear that when employers got their contracts right, dismissals "as unfair as Heather's" could still go unchallenged.

She said new employment legislation was "rushed through Parliament" and had failed to achieve what the Government intended - at the same time creating a risk for employers.

Labour Minister Kate Wilkinson has been criticised by unions and opposition MPs over the Government's recent moves to extend 90-day trial laws to all businesses, beyond the current 19 employees or less requirement.

A spokesman for the minister said today protections for employees were built into legislation and the court had simply found those came into play.

"Employers do need to make sure when they use a 90-trial period that their contracts are accurate and correct, and where they are not the law isn't going to back them up."

He said it showed the law was working as intended.

"If an employer misuses a trial period they will get caught out."

Business NZ said the case illustrated that good faith in the workplace was in danger of being undermined by invective against employers seeking only to act within the law.

The case in question appeared to pan out the way it did because of the initial flawed legal advice the pharmacy owners had received.

Business NZ said the union campaign against employment trial periods was presenting only one side of the employment issues involved and wasn't helpful for good employment relations.

The court didn't award costs and has left the parties to try and negotiate a remedy.

- NZPA