Pitfalls of trial periods

James is keen to get an office administration job. He has a qualification but no experience. He is offered a three-month trial - verbally. Is this legal? Gerry gets a building apprenticeship. Six months later there is still no formalised training agreement and they "let him go". Is this legal?

Jodie has a job as a chef and a trial period of three months is written into her employment contract. After three months she is told she is not up to scratch and asked to leave. Is this legal?

No, no and no.

Urban myths abound about trial periods, says Kim Smith of Robert Half Finance and Accounting employment consultants. "I've seen clients brazenly write in 90 days' probation thinking they can just fire the person if they don't work out. While others don't think they can trial at all."

Trials, also called probationary periods, are legal if in writing within the employment contract, says employment law specialist Minter Ellison partner Jennifer Mills.

A trial must involve regular reviews, regular performance checks and correct disciplinary procedures if performance isn't good. Someone on probation is a permanent employee and must be treated as such, she adds. "The difference is the time frame."

Too many people don't know their rights, says Darien Fenton, national secretary of the Service and Food Workers Union.

"A trial period doesn't take away your rights. You can't be dismissed just because the trial period has ended. If you're dismissed over that period you have to be treated the same as any other permanent employee. I think it is often a lazy way for employers to get around indepth recruiting."

The employer must give reasonable notice that the performance during the probationary period was unsatisfactory, says Auckland New Zealand Institute of Management president Kevin Gaunt.

"Reasonable depends on the type and complexity of the work. It could be a week for a forklift driver, provided they had received adequate training, but three months for a production manager.

"Basically, someone needs to sit down with the person and explain the issues, then work through what might be the cause and how to make improvements."

YouthLaw often receives inquiries relating to trial periods, says YouthLaw solicitor John Hancock, particularly with young people entering trades. Sometimes they are on trial for three months, then six. Or they don't realise they're "on trial" until they are dismissed.

"Young people need to know they have rights and that any probationary period should be in writing. But insisting on a written agreement can be really hard for a young school leaver to do," says Hancock, adding that YouthLaw helps young people sort out such situations.

Unitec apprenticeship training trust manager Mark Urlich says trials are often misused in the building industry.

"There are guys who are taken 'on trial' but no period specified. Twelve months later they're still 'on trial' with no apprentice training agreement signed up or are dismissed because the 'trial' is over."

He can help them to get recognition for the time they have done if they have evidence of their practical hours, such as pay slips or time sheets. He recommends apprentice hopefuls check their rights through apprenticeship trusts, industry training organisations or polytechnics.

Hospitality Association of New Zealand northern regional manager Sara Tucker says practical skills, can be assessed quickly. "We suggest the recruitment process includes the person doing a shift trial, no payment involved. We have a form we give our members to give applicants that shows it is a true trial and part of recruitment."

At management level, she advises members to include a trial period as part of the employment agreement following appropriate performance management processes.

Another issue is the "temp-to-perm" scenario, which is taking a temp for 90 days and making them permanent if they are good. "That is also against the law," Smith says. "But as it gets harder to find good candidates and the more leery employers become about making a mistake the more likely they are to do this."

The temp-perm scenario also limits employers' choices, says Smith, because only a proportion of candidates are available for temping and they are often choosing temp not permanent work. She recommends trials.

"No matter how good your due diligence, it can be hard to judge whether the person will be the right cultural fit. We do it here because we're bringing accountants into sales, a different type of role. We have not terminated through a trial yet but have had an employee decide after six weeks the job wasn't for him."

Trial periods

Section 67 of the Employment Relations Act says a trial period must be in writing in the employment agreement.

The employer can terminate the employee's contract, but only if it has:

* Given reasonable notice the performance in the probationary period was unsatisfactory

* Advised the employee their performance was not meeting requirements, and why

* Given adequate opportunity, support and time to improve that performance

* Advised their employment is at risk if their performance fails to improve

YouthLaw