A trial period of up to 90 days may be used by employers for all new employees. The key attraction to employers of a trial period is that, if implemented correctly, an employee is unable to subsequently challenge a dismissal during the trial period. However, there are a number of conditions that must be met by the employer before an employee's employment may be lawfully terminated under a trial period clause. If these conditions are not met, the employee will be able to challenge his or her dismissal.

Further, even if an employee's employment is validly terminated under a trial period clause, employers should be aware that an employee may still bring a personal grievance or claim for unjustified disadvantage in their employment, or for discrimination, for example. Because of this, good recruitment, effective employee orientation and training remain the backbone of successful HR management. However, should you employ a new employee who does not meet your expectations, a trial period clause offers some respite

Offer of employment and trial periods

If during the recruitment process a trial period has been negotiated and agreed to, it would be good practice to add a paragraph to the Offer of Employment letter referring to the inclusion of the trial period clause and the dates that it applies. For example:

“The trial period agreed to as part of our Employment Agreement negotiations will commence on [date] and finish on [date].”

Requirements for 90-day trial periods

Certain requirements must be met before an employer may lawfully terminate an employee's employment under a trial period clause. These requirements are as follows:

• A trial period may be used for new employees only, meaning employees who have not worked for you previously.
• A new employee is not automatically subject to a trial period. A trial period must be agreed in writing, that is, in the employee's employment agreement. A sample clause for this purpose can be downloaded here. This clause is in Word format and is subject to this disclaimer. It is important to get the wording of the clause correct.
• If you want to employ a new employee on a trial period where a collective agreement is in place, you will need to agree this with the employee separately, in writing, even if a trial period is included in the collective agreement. You will also need to make sure that if you agree to a trial period, your agreement is not inconsistent with any of the terms of the collective employment agreement.
• The employment agreement containing the trial period must be signed by the employee before the employee commences work. Please refer to our Case Study.
• If you decide to terminate an employee's employment under a trial period clause, notice of termination must be given within the trial period (which can be up to 90 days). However, the notice period itself can extend outside the trial period.
• Notice must be provided in accordance with the employee's employment agreement. The parties may agree that a shorter notice period will apply during the trial period (eg two weeks instead of four weeks), but that notice period must be recorded in the employment agreement (ideally in the trial period clause).
• A trial period is a one off – it cannot be rolled over or extended.
• The employer's overriding obligation to act fairly and reasonably in its dealings with the employee remains during a trial period. You can therefore be liable if you fail to tell an employee during the trial period that their performance is poor. It is also recommended that any decision to dismiss still be preceded by a fair process (refer to Disciplinary Procedures).
• Benefit stand down periods will not apply to employees that are dismissed under a trial period if they were on a benefit immediately prior to accepting the position.

For further information see the Department of Labour website.

If you are going to end the employment relationship under the provision of the 90 day trial period, click here for further content.