The Employment Relations (Trial Periods) Amendment Bill achieved Royal Assent on 21 December 2023, meaning any employer – regardless of their total employee headcount – can use trial period clauses within their employment agreements. Prior to that date, only employers with fewer than 20 employees could utilise this clause.   

Trial periods let employers trial an employee and terminate their employment without having to follow a disciplinary process should the trial not work out. BUT be warned the following principles must be adopted for the trial period to be relied upon as a valid right for dismissal: 

• An employment agreement containing a trial provision may be entered into by an employer and an employee who has not previously been employed by that employer.
• Trial provision means a written provision in an employment agreement that states, or is to the effect, that: 
• (a) For a specified period (not exceeding 90 days), starting at the beginning of the employee’s employment, the employee is to serve a trial period; and
• (b) During that period, the employer may dismiss the employee; and
• (c) If the employer does so, the employee is not entitled to bring a personal grievance or other legal proceedings in respect of the dismissal. 

If you need help in developing a trial period clause for your employment agreements or you’re thinking about having your employment agreements reviewed, please get in touch with our HR teams in Auckland, Hawke’s Bay or Taranaki. It’s considered best practice to have employment agreements reviewed every two years.