Trial period vs Probationary period - yes they are different!

Written by: Holly Whitney
Jun 04 2024
HFW

Understanding the differences essential for employers and employees

Ever heard the term ‘I’m just on a trial’? It’s usually a case of someone young starting out in their first job. But the rights of an employee who is in a ‘trial period’ are crucially different to employees whose employment refers to a ‘probationary’ period. So, what is the difference?

Understanding the nuances between trial and probationary periods is essential for both employers and employees.

This important employment law change came about in December 2023, when the Employment Relations (Trial Periods) Amendment Act 2023 was passed under urgency by Parliament. This amendment, which is now in place, allows for all businesses to include a 90-day trial period in a new employee’s employment agreement.

This change in law means it is essential to differentiate between probation periods and trial periods. 

Trial periods

When it comes to a 90-day trial period, certain conditions must be met to validate its legality. These include:

  • Mutual Agreement - Before the commencement of work, both the employer and the employee must explicitly agree to the 90-day trial period.

  • Written Record - It's imperative that this agreement is documented in writing.

  • No Prior Employment - The prospective employee must not have been previously employed elsewhere.

If the trial period proves unsuccessful and the employer opts to terminate the employee, they are required to provide notice of dismissal. This notice must align with the agreed-upon terms stated in the employment agreement. In addition, the notice must be given within the trial period, even if the actual dismissal takes effect after the trial period ends.

The employer is not obligated to provide reasons for dismissal during a trial period. They are also not required to give the employee an opportunity to respond beforehand. However, it is considered good practice to communicate the reasons for the dismissal to the employee.

Probationary periods

While a probationary period can be for new employees, they can also be used if an existing employee wants to prove they have the skills for a different job within the company. 

To ensure a probationary period is valid, the employer must ensure that the following are in place:

  • Written record - The probation period must be recorded in a written agreement

  • Awareness - The employee is aware of the probation period and its duration. 
     

The length of a probationary period should be enough to determine whether the employee is suitable for the role. Excessively lengthy probation periods may discourage new hires or result in potential disputes.  

There are more risks for employers related to a probation period.  Unlike a trial period, an employee can bring a personal grievance for unjustified dismissal in relation to a probationary period. 

Termination during probation necessitates valid justification and adherence to correct dismissal protocols. It's crucial to note that failure to follow these procedures can still result in the employee lodging a personal grievance for unjust or unfair dismissal. Their rights are similar to a non-probationary employee.

Understanding the differences between trial and probationary periods is essential in employment matters. If you need assistance please don't hesitate to contact Ben Molloy on 09 306 0605 or [email protected] or Holly Whitney on 09 985 2534 or [email protected] in our employment team