Should the 90-day trial period be resurrected?

Last month, Business NZ released a document entitled “Election Priorities” to inform political parties of policy areas where the business community sees room for improvement. Part of the wish list includes a call to reinstate the controversial 90-day trial period for employees.

After heavy lobbying from NZ First, the end of 90-day trials was announced by Prime Minister Jacinda Ardern in 2018. It was the first part of a legislative overhaul of employment laws, most of which rolled back changes to the laws made by the previous National government. 

On the call to reinstate 90-day trials, Catherine Beard, Director, Advocacy at Business NZ, told media, “Employers wanted to see the trial periods return across the board.”

HR leaders unsure

In speaking with Kiwi HR leaders, there are mixed feelings about bringing back the policy.

Mark Lewis, head of people and culture at Connetics, said he doesn’t think the 90-day period should or would change the approach taken to recruitment within his organisation.

“We are an organisation who deliver services with and through people, so attracting and selecting the right people is critical to providing high-quality services to our customers and to the community,” said Lewis.

“When we commit to hiring someone, we strongly believe they have a long-term future with Connetics and we can support them through the different stages of their life and career.”

Risk of being used as a weapon

Roz Urbahn, chief people officer at LIC, thinks when the trial period is used well, it works brilliantly for both parties — but there is the risk of employers using the law as a weapon.  

“You like to think that everyone thinks the same way – ‘90 days, let's give it our best shot, we'll do everything we can to adapt you and get you sorted,’ but there’s the risk of it being used as a weapon. That's the downside,” she said.

There are employers that see the law as “90 days of labour,” said Urbahn.

“When you see it come through in the news, you're like, ‘Did you seriously do that with that person? That is beyond awful.”

But Fiona McMillan, partner at Lane Neave, told HRD she didn’t recall any instances of employers abusing the law when it was in place. 

“At the end of the day, recruitment costs time and money so it is not in an employer’s best interests to bring people on and then terminate them under the 90-day trial period because they can,” she said. 

Legal considerations for employers with 90-day trial

McMillan is in favour of bringing the trial period back saying, “It can be an effective tool in managing employees at the beginning of the employment relationship.”

But she also highlighted aspects of the law that trip employers up.

“There [is] still an obligation to act in good faith which does not seem to sit right with the idea of being able to tell people at day 89 that they no longer had a role. 

“Plus, we saw employers’ trip themselves up by not having a signed Employment Agreement with the 90-day trial period clause in it before the employee commenced work. The new legislation may look to take a stance on these issues,” said McMillan.