90-Day Trial Periods – A Quick Guide for N.Z Employers
A 90-day trial period allows New Zealand employers to assess a new employee’s suitability for permanent employment while limiting the risk of an unjustified dismissal claim – the most common claim when an employee is dismissed by an employer.
Trial periods are strictly interpreted and enforced by the Employment Relations Authority (‘the Authority’) and Employment Court (‘the Court’) – even small mistakes managing a trial period can render them invalid, exposing an employer to successful personal grievance claims and financial remedies being imposed.
What is a 90-Day Trial Period?
A 90-day trial period is a contractual arrangement that applies only to ‘new employees’ who have never worked for the employer before.
When properly implemented, a 90-day trial period prevents an employee from bringing a claim for unjustified dismissal if their employment is terminated during the trial period, or the first ninety days of employment. Employers must still act in good faith, and trial periods do not prevent other legal claims such as unlawful discrimination, or sexual harassment.
Since December 2023, all employers can use 90-day trial periods in New Zealand, regardless of business size. However, they cannot be used for employees employed under an Accredited Employer Work Visa (AEWV) – this is legally prohibited due to immigration policy requirements.
Employer Pro has a comprehensive Employer Toolkit available for managing ‘90-day Trial Periods’, including step-by-step guidelines for correct implementation, a template termination letter, a compliance checklist and more for ensuring a trial period is managed correctly.
Trial Periods vs Probationary Periods
Trial periods are often confused with probationary periods, but they are legally distinct:
90-Day Trial Periods: Apply only to brand-new employees. If compliant and implemented correctly, they stop unjustified dismissal claims and do not require a formal dismissal process to terminate employment. They represent extremely powerful contractual mechanisms regarding an employer’s ability to terminate employment.
Probationary Periods: Can apply to new employees or existing employees moving into new roles such as a promotion. They do not limit unjustified dismissal claims, and ending employment requires a fair, thorough and documented employment process.
Using the wrong contractual mechanism, or following the wrong process, can expose employers to significant legal risk. Ensuring a 90-day trial period is implemented and managed correctly is imperative if an employer wants to protect itself from legal risk.
Case Law Snapshot – What Recent Decisions Tell Employers
Mortimer v Auckland Steam ‘N’ Dry Limited [2025] NZERA 808
The Authority found that an employer could not rely on a 90-day trial period because the clause in the employment agreement did not meet the statutory requirements in section 67A of the Employment Relations Act 2000.
The employee commenced work before a valid trial period was agreed, and the provision itself did not clearly state that dismissal under it precluded personal grievance claims. Because the trial clause was invalid, the employer had to justify the dismissal under the usual justification test, which it was unable to do since no formal employment process had been followed.
The employer also failed to provide:
A proper induction, training, or performance feedback before dismissal.
Any evidence to justify dismissal on performance grounds.
The correct notice and contractual entitlements.
The Authority ruled that the dismissal was unjustified and ordered the employer to pay over $30,000 in financial remedies.
Employer Takeaway: A 90-day trial clause must be strictly compliant with the statutory requirements, implemented correctly, and agreed before work begins. Employers cannot retrospectively rely on an invalid trial period to avoid personal grievance risk. Careful drafting, early agreement, i.e. ensuring the employment agreement is signed before the employee commences work, and correct notice of termination are essential. Otherwise, the dismissal will be rendered unjustified and expose the employer to significant financial remedies being ordered against them.
Brennan v Stella 2020 Limited [2025] NZERA 449
The Authority determined that the employer failed to validly invoke a 90-day trial period because it did not comply with the notice period requirements in respect of terminating an employee’s employment under a trial period. The employee was employed as a senior stylist under a trial period with a one-week written notice requirement for termination.
While the employee’s employment agreement contained a 90-day trial period clause, the employer dismissed the employee immediately and failed to provide one weeks’ notice of termination in writing as required by the trial period clause. The employer did not give the employee written notice or pay the employee for their notice period. The employer did not participate in the Authority’s process or file a Statement in Reply.
The Authority determined that the employer failed to validly invoke the trial period clause since it did not provide the employee with written notice of termination, or payment for the contractually required notice period, which invalidated the 90-day trial period.
The Authority awarded the employee over $25,000 in financial remedies, including for the unpaid notice period.
Employer Takeaway: Always ensure a 90-day trial period is valid before terminating an employee’s employment, including compliance with any contractual obligations regarding the applicable notice period and how notice of termination is to be managed. In most cases, notice of termination is to be given in writing, so ensure a letter to the same effect is presented to the employee confirming dismissal under the trial period and comply with contractual notice obligations.
Tepania v Haven Falls Funeral Home Limited [2023] NZERA587
The employee began working and signed an employment agreement including a 90-day trial period after working more than two days. The employer later dismissed the employee under the trial period for performance concerns.
The Authority held the trial period was invalid because the employee had commenced working before signing the employment agreement, meaning he was not a ‘new employee’ for the purposes of the trial period. The Authority awarded the employee over $22,000 in financial remedies (excluding the employer’s own legal costs).
Employer Takeaway: Always ensure 90-day trial periods are only used for new employees and that the employment agreement contains a valid trial period clause, which must be signed and returned in advance of the employee physically commencing work.
Essential Compliance Requirements for 90-Day Trial Periods
A 90-day trial period is only valid if all their legal compliance requirements are met. Employers must ensure that:
The trial period is clearly written into the employment agreement and contains the required wording, including stating that if dismissed during the trial period, the employee cannot bring a personal grievance in respect of the dismissal.
The employee is given a reasonable opportunity (best practice is at least one week) to seek independent advice on a proposed employment agreement including a trial period.
The employee is genuinely new and has never worked for the employer before.
The trial period starts on the first day of work and does not exceed 90 calendar days.
The employment agreement is signed and returned before the employee starts work.
Notice of termination is given correctly before the 90-day period expires and in accordance with the applicable clause in the employment agreement.
A trial period cannot be used for migrant employees where the employer is accredited with Immigration New Zealand under the AEWV.
If any of these steps are missed, the trial period may be declared invalid and cannot be relied on, exposing the employer to significant legal risk.
Managing a 90-Day Trial Period
While a formal performance management process is not required under a trial period, good practice still matters. Employers should:
Hold regular check-ins during a trial period.
Clearly communicate expectations and raise concerns early.
Keep brief written records of discussions and feedback.
If employment is ended, employers should first confirm that the trial period is valid, then provide written notice of termination under the trial period before the end of the 90-calendar day period expires.
If the trial is successful, it is good practice to formally confirm the employee’s ongoing employment.
Common Employer Pitfalls
Trial periods are commonly invalidated when employers:
Do not provide a prospective employee with enough time to seek independent advice.
Allow employees to start work before signing the employment agreement.
Assume a trial period applies automatically and fail to include a compliant clause inside the employment agreement.
Confuse a trial period with a probationary period.
Give notice of termination after the 90-day period has expired or give notice of termination incorrectly.
If an employer fails to meet any of the compliance requirements when using a 90-day trial period, then they will face exposure to legal risk and financial remedies in the event of subsequent legal dispute. This is because the trial period will be invalid and therefore the employer will not be protected from a claim of unjustified dismissal.
Key Takeaway for Employers
A 90-day trial period can provide strong protection to an employer from unjustified dismissal claims, but only when strict compliance is followed and the trial period is implemented correctly.
Clear documentation, good communication, and attention to timing are critical. When in doubt, employers should seek professional advice before relying on a trial period.
Compliance Warning
A 90-day trial period will not protect an employer if any legal compliance requirements are missed or not managed correctly.
Common mistakes like allowing an employee to start work before signing the employment agreement, not giving them sufficient time to seek independent advice on an offer of employment, including a trial period, or giving notice of termination incorrectly, etc. will invalidate a trial period and expose the employer to a successful personal grievance claim.
This article is provided for general information only and does not replace professional advice. Employers should seek advice specific to their circumstances from Employer Pro before implementing or relying on a 90-day trial period, including managing termination of employment. Employer Pro has a range of employer focused resources and services available through our competitive Employer Protection Packages.
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