Trial periods of up to 90 days are available to all New Zealand employers, having previously been limited to those with fewer than 20 employees. They offer real protection — but only when used precisely, and the requirements are unforgiving of small errors.
What a valid trial period requires
Every one of these must be satisfied:
- The employee must be a genuinely new employee. Someone who has previously worked for you in any capacity, including casually or through a labour hire arrangement in some circumstances, cannot be placed on a trial period.
- The trial period must be in writing in the employment agreement, stating the period and that the employer may dismiss within it, and that the employee may not bring a personal grievance for unjustified dismissal.
- The agreement must be signed before the employee starts work. This is the requirement most often failed.
- The employee must have had a reasonable opportunity to seek independent advice before signing.
- Dismissal must occur within the trial period, with notice given inside it.
The timing requirement is absolute. An employee who starts on Monday and signs the agreement on Tuesday is not on a valid trial period, no matter what the document says. Employers lose this protection on that single point more than any other.
What the trial period does and does not protect
A valid trial period prevents the employee raising a personal grievance for unjustified dismissal. That is a meaningful protection and it is also the only one.
It does not prevent grievances for:
- Unjustified disadvantage during employment.
- Discrimination.
- Harassment, including sexual and racial harassment.
- Duress relating to union membership.
- Breach of good faith obligations.
Nor does it remove the obligation to act in good faith, to pay correctly, or to give the contractual notice. An employer who dismisses in a way that is humiliating, or who fails to pay out entitlements, remains exposed on those grounds.
Notice, and the one thing to get right
Notice must be given within the trial period. Giving notice on day 89 that takes effect on day 95 is generally fine; giving notice on day 92 is not, and the protection is lost.
The contractual notice period applies unless the agreement provides otherwise for trial period dismissals, and payment in lieu is common. Count the days carefully from the actual start date.
Personal grievance remedies changed in 2026
The Employment Relations Amendment Act 2026, in force from 21 February 2026, significantly restructured personal grievance remedies. Three changes matter:
- Serious misconduct removes remedies entirely. Under new section 123B, where an employee’s actions contributed to the situation giving rise to the grievance and those actions amount to serious misconduct, the Authority or Court must not provide any remedy.
- Contributory conduct short of serious misconduct now removes reinstatement and compensation for injury to feelings or loss of benefits, and remedies can be reduced by up to 100 percent.
- A high income threshold applies. Employees whose annual remuneration meets or exceeds the specified threshold — set at $200,000 — may not pursue a personal grievance for unjustified dismissal or unjustified disadvantage.
The practical effect is a meaningful rebalancing. An employer facing a grievance from an employee whose own conduct contributed to the situation is in a considerably stronger position than before.
That is not a reason to relax on process. The substantive and procedural fairness requirements below are unchanged, and a dismissal that is unjustified with no contributory conduct still produces the full range of remedies.
Dismissal outside a trial period
Where no valid trial period exists, dismissal must be both substantively justified and procedurally fair. The statutory test is what a fair and reasonable employer could have done in the circumstances.
Procedural fairness at minimum requires:
- Raising the concern with the employee, in specific terms, before any decision is made.
- Providing the relevant information the employer is relying on.
- A genuine opportunity for the employee to respond, with the right to representation and adequate time to prepare.
- Genuinely considering that response with an open mind before deciding.
The most common failure is a predetermined outcome dressed as a process. Authority members are experienced at identifying decisions that were made before the meeting, and remedies include reinstatement, lost wages and compensation for humiliation and distress.
Ninety-day trial versus probationary period
These are different instruments and are frequently confused. A probationary period can be used with any employee, including existing ones, but it does not remove personal grievance rights. It signals that performance is being assessed and requires the employer to follow a fair process including support, feedback and an opportunity to improve.
Using the words interchangeably in an employment agreement creates ambiguity that will be resolved against the employer.
Practical guidance
- Have the signed agreement in hand before the first shift — no exceptions, including for urgent starts.
- Give genuine time and encouragement to take advice, and record that you did.
- Diarise the trial period end date from the actual start date on day one.
- Do not rely on a trial period as a substitute for recruiting carefully or managing performance. Most disputes arise where it was used to avoid a conversation.
- Even within a valid trial period, act decently. The protection is narrow and the other grievance grounds remain open.
Employment New Zealand publishes guidance and template employment agreements free at employment.govt.nz, and its agreement builder produces compliant documents at no cost.
General information only, not legal advice. Employment disputes turn on their facts — take advice before dismissing.
