Four trial period failures against early childhood centre

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My recent column (‘Employers hammered over trial periods,’ WBN, June 2016, page 19) outlined some of the issues that employers continue to get “wrong” in relation to trial periods.

In four decisions published by the Employment Relations Authority (Authority) on August 23, 2016, a previously unseen “wrong” has emerged.

Lighthouse Early Childhood Centre operates two early childhood centres (ECE) located in Albany and Howick. In December 2015, three ECE teachers resigned giving four weeks’ notice as per their employment agreements.

Each resignation was swiftly met by the employer serving the teachers with notification they were instead, being dismissed on one week’s notice, pursuant to the trial periods in their employment agreements. The fourth employee was dismissed in January 2016 for performance issues, pursuant to the trial period in her employment agreement.

Ordinarily, an employee dismissed pursuant to a trial period is prohibited from raising a personal grievance in relation to the dismissal and is unable to put the matter before the Authority.

However, many of the trial period dismissal cases put before the Authority challenge the validity of the trial period itself. Many trial periods are found to be invalid as they were either not set up properly in the first place or the employer did not dismiss the employee in accordance with the trial period. The four decisions just issued involve the trial period not being set up properly from the outset. If a trial period is found to be invalid, the employee is then free to challenge their dismissal before the Authority.

Section 67A of the Employment Relations Act 2000 (Act) sets out the mandatory inclusions a trial period must have to be valid. One of those inclusions is that a “Trial provision means a written provision in an employment agreement that states, or is to the effect, that – (a) for a specified period (not exceeding 90 days), starting at the beginning of the employee’s employment, the employee is to serve a trial period…”.

The issue with the trial periods that applied to the four Lighthouse employees was that it did not state when the trial period would commence. The relevant clause in their employment agreements stated “A trial period will apply for a period of ninety (90) days (“the Trial Period”) under s.67A Employment Relations Act 2000, to assess and confirm the suitability of the Employee for the position.”

Although there was a separate clause in each of the employment agreements which specifically stated the employee’s commencement date, it was not referred to in the trial period clause, and neither did the clause state the 90 days would begin at the commencement of employment.

The Authority was not swayed by the Lighthouse lawyer’s argument that this was an overly-technical approach to the trial period legislation. The Authority and Employment Court have taken a very strict approach to trial periods complying exactly with the legislation since trial periods were introduced in 2009.

This is because it deprives an employee of the right to invoke the personal grievance provisions in the Act, and effectively denies an employee the right to take legal action against a dismissal, which they would otherwise have a legal right to challenge.

Lighthouse has 28 days within which to challenge the Authority’s determinations in the Employment Court and given a number of unusual statements in the determinations, I suspect there is a high chance a challenge will be filed.

During my eight years specialising as an employment lawyer, it would be fair to say that the ECE industry can best be described as the ‘wild west of employment’. Exactly why this has occurred in this particular industry, is a mystery to me.

I have seen a number of ECE employment agreements entitled “Collective Employment Agreements”, which are agreements between an employer and a union representing its members. When I have asked which union is involved, I am informed the workplace is not unionised and there is no union. Clearly then, the employment agreement cannot be a Collective Employment Agreement.

Other gems in these agreements contain clauses that the employer, at their sole discretion, can instantly dismiss an employee without reason (no they can’t), can terminate employment once the employee reaches age 65 (in breach of the age discrimination section of the Human Rights Act 1993) and make liberal references to the Employment Tribunal which ceased to exist some 16 years ago when it was replaced by the Employment Relations Authority.

While employers and employees are free to agree and negotiate terms and conditions of an employee’s employment, such terms cannot be unlawful. In the same way an employer cannot include clauses that compel an employee to commit a criminal act, neither can they contract out of the law by, for example, having the employee agree to an hourly rate below the minimum wage or granting the employer powers that the law says they cannot have.

Lack of employment law knowledge is not a defence for employers, who have an obligation to their employees to ensure they are aware of, and are complying with, all relevant employment laws.

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Erin Burke

Employment Lawyer and Director at Practica Legal Email: erin@practicalegal.co.nz phone: 027 459 3375

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