Recruitment of new employees can be a challenging task for employers. It’s often difficult to assess from a simple job interview whether or not someone will be a suitable fit for the role. For this reason, some businesses have prospective employees undertake work trials before deciding whether to employ them. However, as one recent case involving a Waikato employer demonstrates, there are potentially serious financial consequences for employers who don’t implement these procedures correctly.
In Wilkinson v Jamark Plumbing Limited [2018] NZERA 216, Ms Wilkinson applied for an office administrator role that was advertised online. After an interview, she worked for three days at the office, before being informed by the managers that she wasn’t a good fit for the role and wouldn’t be employed. Jamark claimed that the three day work period was an agreed trial for Ms Wilkinson to showcase her skills in the role, before Jamark decided whether or not to employer her.
Not surprisingly, the Employment Relations Authority found the work trial to be invalid. Ms Wilkinson was found to have been employed by Jamark, even though the Authority accepted Jamark had genuinely believed Ms Wilkinson had agreed to a 3 day trial period. The Authority considered the following factors in making this decision:
- the tasks carried out had been actual work duties that had benefited the business and allowed other employees to focus on other tasks;
- She had not been required to sign the ACC visitors book as all other non-employees were required to do; and
- Jamark paid her for the three days she had worked.
The trial period also didn’t comply with the requirements of a 90-day trial (for example, it was not agreed in writing before work had commenced), and therefore Jamark was not justified in dismissing Ms Wilkinson without conducting a fair process. Jamark was ordered to pay Ms Wilkinson over $15,000.00 in lost wages and compensation.
This case reinforces the need for businesses to take care in their recruitment processes, and in particular their use of work trials or trial periods. If these are not implemented and managed correctly then businesses may unknowingly take on employer obligations, which would prevent dismissal without a fair process.
The Government’s Employment Relations Amendment Bill currently before Parliament will further change the law surrounding trial periods, by limiting the availability of 90-day trials in employment agreements to employers with fewer than 20 employees. If these amendments are passed (which appears likely), larger employers will no longer be able to utilise 90-day trials. Given these impending changes, businesses need to ensure their agreements and recruitment processes remain effective.
If you have any questions regarding the validity of your employment agreements, trial periods, and how you can best protect yourself and your business please feel free to contact us.
Cameron Fraser is a Solicitor in the Commercial & Employment Disputes Team at Norris Ward McKinnon. You can contact Cameron at [email protected]
