ERA examines critical hiring requirements
The Employment Relations Authority (ERA) recently dealt with a worker's challenge to their dismissal during a 90-day trial period. The worker, who started as a part-time junior piercer and retail assistant, questioned whether their employer followed proper legal requirements when presenting their employment agreement.
The issue of this case was the timeframe given to review the employment agreement - just one and a half working days before the job was to start. Under New Zealand employment law, employers must provide workers with a "reasonable opportunity" to seek independent advice about their employment agreements before signing.
The matter raised important questions about the balance between workplace trial periods and employment agreement bargaining requirements.
Initial contact between the parties began on 25 September 2023, when the worker emailed expressing interest in a position at an Auckland piercing studio. While seeking full-time work initially, they later accepted a part-time role with expected hours of 20 per week.
On 4 October 2023, a meeting took place to discuss employment terms. The employer's human resources advisor testified: "I discussed the content of the envisaged individual employment agreement and went through its provisions page by page with [the worker]." However, no physical copy was provided during this meeting.
The employment agreement was sent by email on Monday 9 October at around 7pm, with instructions that the offer would be withdrawn if not accepted by the start date of 11 October. This gave the worker approximately one and a half working days to review and potentially seek advice about the agreement.
The signed employment agreement included a trial period provision stating: "During the trial period, your employment may be terminated with one week's notice by either party, or payment in lieu of such notice." This clause would later become crucial to the dispute.
The employer expressed concerns about reliability and timekeeping during the brief employment period. A dispute arose in mid-November when the worker requested leave for early December.
On 22 November 2023, the employer terminated the employment using the trial period provision. Their dismissal letter stated:
"We feel [the worker's] continued lack of skill and commitment to your work here does not match our expectations for one who seeks to fill a role with us."
The ERA found that while the employer breached section 63A(2)(b) of the Employment Relations Act by not providing sufficient time to seek independent advice, this alone did not invalidate the trial period. As noted in the determination:
"Failure to comply with these requirements does not alone render an employment agreement subsequently entered into ineffective, but does make a prospective employer liable to a penalty under s 63A(3)."
The ERA emphasised the importance of proper timeframes, recommending that employers "take heed of the need to give prospective workers a more reasonable time frame to seek independent advice before an individual employment agreement is entered into."
Ultimately, the Authority determined "that a legitimate 90-day trial period prevails and [the worker] is not entitled to any remedies sought as she has not right to challenge the decision to dismiss her."
The ERA directed both parties to attempt resolving any costs issues between themselves, with the option to return to the Authority if needed.