How to manage 90-day trial periods in New Zealand

Published 7 March 2025 | 2 min read

The 90-day trial period can be a valuable tool for small businesses looking to hire new employees with reduced risk. However, this law has some potential fishhooks that can catch employers out.

Some New Zealand employers have been tripped up by minor technicalities, leading to personal grievances and legal disputes.

A simple paperwork error or misunderstanding of the law can invalidate the trial period entirely. Kiwi employers need to get it right the first time to avoid costly mistakes.

Businesses facing legal battles

Many employers assume that simply including a 90-day trial clause in an employment agreement is enough. However, there have been multiple cases where businesses have faced penalties due to incorrect implementation.

A recent Employment Relations Authority (ERA) decision ruled a trial period invalid because the agreement was not signed before the employee started work.

In another case, an employer failed to give proper notice within the trial period, leading to a claim for unjustified dismissal.

These missteps can prove expensive and damage an employer’s reputation.

Frequently asked questions:

Who can use a 90-day trial period?

All employers, regardless of size, can utilise 90-day trial periods for new employees.

Can an employer dismiss an employee without reason?

While reasons don’t need to be provided, dismissals must still follow legal requirements, including notice periods.

What happens if the agreement is signed late?

If the employee starts work before signing the agreement, the trial period is void.

Do employees still have rights?

Yes, employees on trial periods still have full employment rights, except for bringing a personal grievance for unjustified dismissal.

The legal considerations for NZ employers

• Employment agreements must be signed before work starts. A signed contract after the first shift renders the trial period invalid.
• The trial period clause must follow the correct tikanga (process). It must explicitly state that the employee is on a trial period and outline dismissal conditions.
• Proper notice must be given within the trial period. If notice is required under the agreement, failing to provide it correctly can invalidate the dismissal.
• Good faith obligations still apply. Employers should communicate expectations clearly and provide feedback.
• Trial periods don’t protect against all claims. Employees can still claim discrimination, harassment, or breaches of good faith.

Getting 90-day trial periods right

To successfully implement a 90-day trial period, ensure employment agreements are correctly drafted and signed before the employee starts work. Provide a copy in advance so the employee has time to seek legal advice.

If dismissal is necessary, follow the correct notice requirements as per the agreement. Even though reasons aren’t legally required, explaining the decision helps maintain good faith and protects against other legal claims.

When in doubt, seek professional advice, such as EQ Consultants to avoid costly errors. By getting trial periods right from the start, businesses can drive better hiring decisions while staying compliant with employment law.

Note: This information is based on official details from Employment New Zealand and is subject to change. Always refer to the latest guidelines for the most accurate information. Visit Employment New Zealand here.