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Recruitment Work Trials and 90 Day Trial Periods: Treat with Caution.

With 90 day trial periods available to all employers once again, and the common practice of bringing in candidates to ‘trial’ them as part of the recruitment process, here is an important case[1] to remind us to proceed with caution.

Ms Tepania worked as a Funeral Director for Haven Falls Funeral Home from July to 3 October 2022. It is noteworthy that it took over a year for this matter to reach the Employment Relations Authority.

The employee attended an interview with the employer on 11 July 2022. The employee then attended the employer’s premises on 12 July to observe the funeral directors’ team. The employer said this was standard practice for all candidates to ensure that due to the nature of the work, candidates had a good understanding of the type of tasks expected of them. Ms Tepania disputed she simply observed and said she also carried out some cleaning and assisted in preparing the reception lounge to receive guests. The employer disputed this. Ultimately the Authority did not have to determine the nature of Ms Tepania’s attendance on the 12th.

Later that day the employer emailed the employee an unsigned Employment Agreement with a reference to the trial period provision in the email and a clause in the Agreement. The Employment Agreement showed the starting date of employment as being two weeks after the date of the email. There were further arrangements made for Ms Tepania to come to do further observations the following week, at a time and duration determined by Ms Tepania. The employer then went overseas.

Ms Tepania attended the workplace the following Monday and Tuesday for full days. The employer’s daughter, who was responsible for HR, returned to work on the Wednesday after a period of sick leave. Ms Tepania asked if she could remain for the rest of the week because she was enjoying it so much. It is common ground that she was helping the other Funeral Directors in their tasks on the Monday and Tuesday.

It was agreed that they would start Ms Tepania’s employment early and backdate the start date to the Monday. Ms Tepania and the daughter went over the terms of the Employment Agreement, including the trial period, and the Agreement was signed on the Wednesday, and Ms Tepania was subsequently paid for the whole week.

Two months later, the employer met with the employee to discuss two customer complaints. After the meeting, the employer dismissed the employee under the 90-day trial provision.

The Authority determined the 90-day trial provision contained in the IEA was invalid because:

  • The employer had employed the employee for “more than 2 days” before signing the Employment Agreement. Therefore, she was “not an employee who had not previously been employed by [the employer]” as required by s67A of the Employment Relations Act.
  • The point at which the employee communicated her acceptance of all the terms of Employment Agreement (including the 90-day trial provision) was on the Wednesday, when she signed the Agreement.

The Authority concluded the employee’s dismissal was unjustified. It found “a number of significant procedural defects” in the employer’s process. The Authority explained that those defects were “more than minor” and caused the employee to be “treated unfairly”.

The Authority awarded the employee $18,000 in compensation, 6 weeks of lost remuneration and holiday pay calculated at the 8% of the 6-week lost remuneration.

The key lessons of this case: Be very cautious when bringing a candidate in for a ‘work trial’. You cannot get them to undertake any ‘work’, otherwise it is likely to be deemed to be work and therefore they are required to be paid for this and any subsequent trial period will be invalid.

[1] Tepania v Haven Falls Funeral Home Ltd [2023] NZERA 587

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