From 23 December 2023, 90 day trial periods became available for all employers to use, regardless of size.  The effect of a 90 day trial period is to permit an employer to dismiss an unsuitable employee in the first 90 days without having to justify the dismissal procedure or reasons.  

The premise of 90 day trial periods is to reduce the risk of making a mistake employing a new person. This should mean that small and medium size employers can complete recruitment quicker and candidates with less experience or, perhaps, without qualifications may be employed.  

For the employer, the removal of this requirement may seem advantageous - but as it is with all things - using 90 day trial periods is not as straight forward as it looks.  We have seen many employers fail to follow the 90 day trial period law properly and be caught up in a personal grievance and a substantial payment to the dismissed employee. 

The law around 90 day trial periods is particularly onerous for employers, because it is the one time when employers essentially have a significant and almost unchallengeable power to dismiss an employee.  The requirements of a valid 90 day trial are listed at ss67A and B of the Employment Relations Act 2000.  The list includes:

• Can only be used for employees who have not previously been employed by the employer in any capacity before

• Must be contained in the intended employment agreement

• Must say, or is the effect, specific number of days the employee will serve under the trial period and when it begins, that the employer may dismiss the employee during the trial period and that the employee cannot bring a personal grievance or other proceeding in respect of the dismissal.

• The trial period must be agreed to by the employee

• Notice of termination must be given during the trial period - even if the notice period means the employment ends after the trial period has ended.

In the 2023 case of Catanach- Hessell v The Butcher’s Mistress, the employer had used a standard employment agreement off the internet and had included a trial period clause.  The employment agreement was sent to the employee following the interview, which she duly signed and returned prior to starting employment.  During the employment, the employer determined that the employee was not suitable for the role and sought to terminate it under the trial period provision.  Unbeknown to them, the trial period clause in the employment agreement was not complete and, in fact, fatally flawed.  The clause did not say how many days the employee was to serve under a trial period which is a mandatory requirement for a lawful trial period.  Without this term in the clause, the trial period was invalid and did not afford any protection against personal grievance for unjustified dismissal. This meant that the employer was required to undertake a fully justified procedure for good cause before reaching a decision to dismiss.  The employer had not done so and accordingly, the dismissal was held to be unjustified. 

The ERA awarded the employee $12,000 as compensation, $7,127.81c for lost wages and $2250 for costs as well as the $71.56 filing fee.  A total of $21,449.37.