A cautionary tale on employing people on trial periods

November 2013

It’ll soon be five years since the National Government first rolled out their controversial 90-day trial period policy. In that time, trial periods have attracted their fair share of litigation as many employers have fallen afoul of the Courts for trying to use them inappropriately. 

A recent case concerning a manager at a furniture store serves as yet another cautionary tale for employers employing people on trial periods.  

In June 2012, Cindy Black responded to an application for a part-time sales assistant role in the Auckland retail outlet of furniture importer, the Dome Trust. She was successful and was hired by the then-Manger of the outlet, Nicole Horstmann.

Things appear to have got off to a good start as a few weeks into her employment, Black was given a pay-rise and over the following months, she was progressively given more responsibility.

In October, Horstmann resigned. Initially Black did not consider applying for the vacant Manager’s role as she had observed Horstmann being put under pressure by Tristram, a trustee of the employer. However Black came to change her mind and raised the possibility of her filling the role with Whimp.

Whimp was initially cool on the idea as he did not believe that Black had sufficient administrative or management experience. However after Black interviewed for the role and proposed that she be engaged on a three month trial period, Whimp agreed to give her a chance in the Manager’s role. 

It seems that just over a month into Black’s stint as Auckland Manager, cracks started to appear in her relationship with her employer.

At a staff meeting in early 2013, Whimp gave employees instructions about a new order processing system that was being implemented. Black was expected to oversee the implementation of the new system. The following day, Whimp phoned Black and found out that she had the system had not been implemented as per his instructions. 

A number of other incidents also came to the attention of Whimp – an instruction to move computer out of the showroom into a back office was not actioned, an underperforming employee was not dismissed, mistakes were found in a stock-take, tenders for a painting the back wall were not obtained, and Black had worked, and charged the company, for hours beyond what was specified in her employment agreement. 

All of this came to a head at a meeting between Black, Whimp and another manager, Frosini Konidares. Black was informed that as they did not believe she was coping with the responsibilities, the company was looking for someone to replace her. While Black would not be dismissed, she would have to revert to a senior sales position. 

Shortly after the meeting, Whimp discovered large piles of documentation which indicated that Black had largely neglected her administrative functions. 

A second meeting with Black was quickly convened. Black was given two weeks’ notice that she would no longer be employed as Auckland manager and told to take a break. 

The following day, Black called in sick and informed another employee to find someone to cover for her the following day. The next day Black rang in again and asked that replacements be found for the following two days however she did not say that she would be absent. She did not inform any of her managers and in particular, Whimp that she would not be in the office.

Black’s absence was discovered shortly afterwards by Konidares. After he attempted to call her but was unable to obtain a response so the following day Konidares sent Black an email terminating her employment. 

Black challenged her dismissal in the Employment Relations Authority claiming that it was unjustified as a result of her employer’s failure to properly set out the changes necessitated as a result of her promotion and failing to provide her with training in the new role.

The employer sought to rely on a number of grounds in opposing Black’s claim including the trial period provision in her employment agreement.

It is well-established that the trial period provisions in the Employment Relations Act cannot apply to an individual that is an employee at the time they enter into the employment agreement.

In Black’s case, she was already an employee at the time she entered the agreement. Therefore notwithstanding her willingness to accept it is a term of her employment, the Authority found that the trial period in the employment agreement was invalid and unenforceable. 

The Authority went on to find Black had been disadvantaged and unjustifiably dismissed as a result of the company’s failure to set clear objectives and, provide Black with adequate support and guidance.

Black was awarded $11,960 reimbursement of lost wages and $6,000 compensation for hurt and humiliation. However as a result of Black’s failure follow the instructions of her employer, and her failure to properly notify her employer about her absence, the compensation was reduced by 70% to reflect her contributory conduct.