Business Accountants: 90-Day Trial Periods: What Employers Need to Know

 

Employers, rejoice! The reinstatement of 90-day trial periods brings a welcomed boost to hiring flexibility. Here’s an update on what you need to know:


The Employment Relations (Trial Periods) Amendment Bill received Royal Assent on 21 December 2023, granting all employers the ability to utilize trial period clauses, regardless of their employee headcount. Previously, only employers with fewer than 20 employees could incorporate trial periods into their employment agreements.


Trial periods allow employers to assess new hires and terminate their employment without undergoing a formal disciplinary process if the trial period proves unsuccessful. However, it’s crucial to adhere to the following principles to ensure the validity of the trial period for dismissal:


An employment agreement with a trial provision can only be offered to a new employee who has not previously worked for the employer. The trial provision must be clearly outlined in writing in the employment agreement, stating: 


(a) The specified duration of the trial period (not exceeding 90 days), commencing from the start of the employee’s employment. 


(b) The employer’s authority to dismiss the employee during the trial period. 


(c) The waiver of the employee’s right to bring a personal grievance or legal proceedings in case of dismissal during the trial period.


With the reinstatement of 90-day trial periods for all employers, it’s essential to understand and adhere to the prescribed principles to effectively utilize this hiring tool. Ensure compliance with employment agreements and seek legal advice if needed to navigate trial periods successfully.


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