Case Study – 90 Day Trial

Client A recently sought to dismiss a new employee, relying on the 90 day trial period in the signed Individual Employment Agreement (“IEA”).  The terms of the IEA recorded that in the event the employee’s employment was terminated during the first 90 days, the employee would be unable to raise a personal grievance for unjustified dismissal.   However, there are certain legal requirements before such a clause can be relied on by an employer, including that the IEA must be signed before the employee has commenced work for the employer.  Client A had allowed the employee to work for it for 2 weeks before it had the employee sign the employment agreement.

Solution
The employer obtained legal advice on its ability to terminate and rely on the clause before it approached the employee.  It was, therefore, aware that it would not be able to rely on the trial period provision if it terminated employment, to prevent the employee from pursuing a personal grievance claim for unjustified dismissal.

The Outcome
The employer entered discussions with the employee regarding job performance.  It did not terminate, and so avoided any personal grievance claim for unjustified dismissal, with a potential for judgment in excess of $10,000.00 had remedies been awarded to the employee.

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CASE STUDY – Employment Agreements 

Client B employed Jo on a Fixed Term Employment Agreement for 3 months to establish whether Jo was suitable for the position.  If Jo worked out in the first 3 months, then Client B intended to offer him permanent employment.  A Fixed Term Employment Agreement was signed, but it did not include any provision explaining the way in which the employment would end and the reason for ending the employment in that way.  Jo was not performing and Client B sought advice as to whether it could terminate the employment in reliance on the Fixed Term Employment Agreement.

Solution
By engaging with a Chamber HR Specialist Provider (via the 0800 24 26 23 Chamber Helpline)  the employer established that the Fixed Term Employment Agreement did not meet the requirements of the Employment Relations Act 2000 and could not be relied on.  The agreement did not contain a provision as to the way in which the employment would end.  A Fixed Term Employment Agreement cannot be used to establish the suitability of an employee for permanent employment.

The Outcome
The employer did not dismiss and followed the correct process to issue a warning to the employee for poor performance. It avoided a personal grievance claim which may have resulted in the employee being reinstated to the position, or awarded significant financial remedies.

For more information please read resource

 

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