90 Day Trial Periods are back for all employers

The government passed legislation at the end of 2023, and brought back the 90 day trial period for all employers.  This change has opened the door for businesses of every size to bring on new employees under 90-day trial periods once again.

Before this amendment came into play, using 90-day trial periods was exclusive to smaller businesses with 19 or fewer employees. Larger businesses had to navigate the hiring waters with probationary periods instead.

How to use the 90 day trial and what does it mean?

If you include a 90-day trial in your employment contract, it means that from the first day the employee starts, they're in a trial period for up to 90 days. During this time, you can dismiss the employee without a reason being given, and without them being able to raise a personal grievance claim against you.

If used correctly, these trial periods are great for checking out new team members. They let you see if someone's right for the job by looking at how they perform, behave, and fit in with the team, all within a specific time.

But remember, the trial needs to be clearly stated in the contract and the new employee must agree to it before commencing working (ie - even before their first shift).

They're applicable to all new employees, except previous employees or those you've previously engaged with in contracting or temping roles. Note that this includes casual, permanent, and fixed-term staff, but not independent contractors. You also cannot use 90-day trial periods for those on certain work visas, like the Accredited Employer Work Visa.

Key points to remember

If an employee starts working for you before the contract containing the 90-day trial period is signed, the 90-day trial period clause  will not be valid or enforceable (this includes someone signing their contract on their first day of work).

90-day trial periods cannot be extended past 90 days.

The 90-day period includes all days - weekends and public holidays too, not just the days the employee works.

During a 90-day trial, if the employer dismisses the employee, they cannot lodge a personal grievance for unfair dismissal, provided the dismissal process is fair and lawful.

Grievances can still be raised on other grounds, such as unjustified disadvantage, discrimination or harassment

Employers must give new hires a reasonable amount of time to review the agreement before starting, ideally a minimum of two working days, with the contract signed before the employee's start date

You can provide a shorter notice period to be given under the 90 day trial period (ie 1 week instead of 4).

Notice must also be given within the trial period; even if the actual dismissal takes effect after the trial period ends.

Terminating employment during a trial requires no specific reason, but the principles of good faith and the opportunity for the employee to comment on the dismissal should be provided.  Notice as per the employment agreement  is still  required for termination, with the option for "pay in lieu" depending on what is stated in the employment agreement.

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Navigating 90-day trial periods with attention to detail, fairness, and open communication can make them a powerful tool for both assessing new talent and protecting your business, as long as you stick to the rules and treat employees with respect.

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