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employment

What are the rules around trial periods for migrant workers?

Key Takeaway

Trial periods in NZ employment law allow employers to dismiss new employees within 90 days without a personal grievance for unjustified dismissal. These periods must be in writing and agreed upon before work starts. For migrant workers, these rules apply equally, though visa implications can be significant. Other fundamental employment rights, such as minimum wage and protection against discrimination, remain.

Trial Periods for Migrant Workers in New Zealand

Trial periods are a feature of New Zealand employment law that allow employers and new employees a period to assess the suitability of an employment relationship. For migrant workers, the same legal framework for trial periods applies as for all other employees in New Zealand.

What is a Trial Period?

A trial period is a clause in an employment agreement that allows an employer to dismiss a new employee within a specified period, up to a maximum of 90 calendar days [Source: Employment Relations Act 2000, s 67A(1)]. If the dismissal occurs during a valid trial period, the employee cannot bring a personal grievance for unjustified dismissal [Source: Employment Relations Act 2000, s 67C(1)]. A personal grievance is a complaint an employee can make against an employer for an alleged wrong, such as unjustified dismissal or disadvantage [Source: Employment Relations Act 2000, s 103].

It is important to note that the restriction limiting trial periods to businesses with fewer than 20 employees was removed in December 2023. As a result, all employers, regardless of their size, may now use trial periods, provided all other statutory requirements are met [Source: Employment Relations Act 2000, s 67A, as amended by Employment Relations (Trial Periods) Amendment Act 2023].

Conditions for a Valid Trial Period

For a trial period to be legally valid and enforceable, specific conditions set out in the Employment Relations Act 2000 (ERA) must be met:

  • New Employee The employee must be a "new employee," meaning they have not previously been employed by the employer [Source: Employment Relations Act 2000, s 67A(2)].

  • Written Agreement The trial period clause must be in writing as part of the employment agreement [Source: Employment Relations Act 2000, s 67A(1)].

  • Prior Agreement The employee must agree to the trial period clause before they start their employment [Source: Employment Relations Act 2000, s 67A(1)]. If the agreement is made after employment commences, the trial period is invalid.

  • Maximum Duration The trial period cannot exceed 90 calendar days [Source: Employment Relations Act 2000, s 67A(1)].

Migrant Workers and Trial Periods

The rules for trial periods apply to all employees in New Zealand, including migrant workers, provided they hold a valid visa that permits them to work in the specific role [Source: Employment Relations Act 2000, s 67A(1), general application of the Act]. An employment agreement containing a trial period clause must comply with all requirements of the Employment Relations Act 2000.

Employers have a legal obligation to ensure that any migrant worker they employ holds an appropriate and valid visa that authorises them to work in New Zealand [Source: Immigration Act 2009, s 350]. Employing a person who is not entitled to work in New Zealand is an offence.

Rights Still Protected During a Trial Period

Even with a valid trial period in place, an employee retains fundamental employment rights and can still raise a personal grievance for matters other than unjustified dismissal. These include:

  • Unjustified Disadvantage A personal grievance for an unjustified disadvantage can be raised if an employee believes their employment has been adversely affected by an action of their employer that is not justified [Source: Employment Relations Act 2000, s 103(1)(b)].

  • Discrimination Personal grievances can be brought for discrimination based on prohibited grounds such as age, gender, ethnicity, or disability [Source: Employment Relations Act 2000, s 103(1)(c); Human Rights Act 1993, s 21].

  • Harassment Protection against sexual or racial harassment remains in effect [Source: Employment Relations Act 2000, s 103(1)(d), s 103(1)(e)].

  • Duress A personal grievance may be raised if an employee is subjected to duress in relation to membership of a union or an employees' organisation [Source: Employment Relations Act 2000, s 103(1)(f)].

  • Breach of Duty of Good Faith All parties to an employment relationship must deal with each other in good faith [Source: Employment Relations Act 2000, s 4]. A breach of this duty can form the basis of a personal grievance [Source: Employment Relations Act 2000, s 103(1)(a)].

  • Minimum Entitlements An employee on a trial period is still entitled to receive the minimum wage [Source: Minimum Wage Act 1983, s 6], holiday pay [Source: Holidays Act 2003, s 16], and a safe working environment [Source: Health and Safety at Work Act 2015, s 36]. Employers cannot use a trial period to circumvent these basic legal entitlements.

Employer and Employee Obligations

Employers using trial periods must ensure that the clause is validly agreed upon, meets all statutory requirements, and is applied fairly within its limited scope. If an employer decides to terminate employment under a valid trial period, they must provide the employee with the period of notice specified in the employment agreement [Source: Employment Relations Act 2000, s 67B].

Employees, including migrant workers, are entitled to receive a written employment agreement [Source: Employment Relations Act 2000, s 59] and should ensure they understand its terms, particularly if it includes a trial period. Understanding the implications of a trial period before signing the agreement is important.

When to Seek Independent Legal Advice

Individuals seeking clarity on their specific employment situation, including the validity or implications of a trial period clause, should seek independent legal advice. Information on employment rights and obligations is available from Employment New Zealand, and free legal advice can be accessed through Community Law Centres for eligible individuals [https://communitylaw.org.nz/].

Key Resources