January saw great headlines about the end to trial periods and return of the workers right. But since then there has been radio silence, so what is actually happening?
Where is the Bill?
The Employment Relations Amendment Bill has been put before parliament. However, it is still with the Select Committee after the first hearing, and they are not due to report on it until September 2018. And then there are another 2 readings, before it finally gets Royal Assent (i.e. final approval). And then there are another 4 months before any changes come into effect. So, there is no need to panic, nothing is going to change for a while yet!
What are the proposed changes at this point?
Obviously, this is not law yet, however the proposed amendments, in summary are:
- Trial periods will only apply if you have fewer than 20 employees
- Rest and meal breaks will return to what they previously were
- More rights for Unions (no surprises there with a Labour Government)
Are trial periods toothless?
Very sadly, the trial period legislation has proved to be exceedingly toothless, with the courts not strongly upholding the legislation as it is written.
The key bone of contention lies around the apparent removal of the “good faith” requirements of the employment relationship, i.e. apparently giving the Employer the right to fire at will and without risk of recourse within the first 90 days. In general terms, the case law is showing that, whichever party is acting in bad faith, will lose. So, if the employer gets to day 89 and says “thanks, but no thanks” without any prior discussions, then they will lose. Equally, if the employee has been talked to regularly about issues and give a chance to improve within the 90 days, but they still try to push a personal grievance claim, then they will lose.
What we have long advised…
Because of this, our advice has always been to make sure you raise issues early, and, if you are considering a 90-day trial period termination, then do go through a formal process. NB, we do have template trial period termination letters and invitation letters for our members, however these are deliberately not on the website as there is a high risk to you of incorrect use. But if you do ever have need for them give us a call and we will talk over your risks and send you the templates if that is appropriate to your situation.
Yippee, Death to Trial Periods!!
But, I opened with the statement “Yippee, death to trial periods!”, surely, I was not serious?? Actually I am.
The Employment Relations Act has long held a provision for Probation Arrangements, and how these compare to trial periods are as follows:
- Both have to be in writing in the employment agreement
- Trial period is for a maximum of 90 days, but a probation period can be as long as you like
- With the Trial period an employee is not supposed to be able to raise a Personal Grievance (but there is no mechanism to stop them doing so, it is only a legal defence), a probation period doesn’t hold any such protection
- A probation period can specify a fast track performance management process which makes it very clear to everyone what is going to happen if they don’t come up to scratch.
The most common mistakes that employers make are:
- Thinking they have a legal protection against a Personal grievance, whereas they only actually have a legal defence, and they still have to pay to defend themselves
- Thinking that a new employee will get there “with a bit more time”, or “a bit more training”, but before they know it, they are at day 89 and they haven’t actually given the employee any direct or honest feedback
- People raise grievance because they are angry, because they don’t understand what they have done wrong, and the employer has not articulated this well.
As such, Probation Periods (as opposed to trial periods) can be for longer periods, can provide a lot more clarity to both parties, and, though they don’t provide the legal protection against a Personal Grievance, the reality is that the Trial Period doesn’t provide much either!
So, where to now?
The current legislation still stands, until such time as the Employment Relations Amendment Bill is closer to completion, we will hold off making any significant changes to our templates until that time. NB if you do download templates at this time, don’t worry, as part of our service to members we will send out a communication with any amendments you need to make to templates you have downloaded. In the meantime, Probation Periods can be included in addition to Trial periods, and this may be something you wish to consider…. And our next HRtoolkit Service tips will be all about how to include them, so follow-us on facebook and/or watch out for our newsletters to find out more.
Call us to talk this through
Feel free to give us a call on 0800 HRtoolkit (0800 47 86 65), we don’t charge for those 10 minute queries, and often that is all it takes to solve your HR nightmares.