Many New Zealand employers get confused about the difference between a probationary period and a trial period. While both relate to the early stages of employment, they serve very different purposes and come with very different legal rights and risks.
With the law being strict around trial periods in particular, it’s essential to understand how each one works so you can use them correctly and avoid costly mistakes.
Here’s a simple guide to help you get it right.
What Is a Probationary Period?
A probationary period is a clause that allows you to assess a new employee’s performance and suitability for the role over an agreed period (usually 3 to 6 months).
During probation:
The employee has full rights to fair process
You must provide regular feedback, support, and training
You must give the employee a fair opportunity to improve if issues arise
If you decide to end the employment during probation, you must follow a full and fair performance or disciplinary process, including:
Outlining concerns
Allowing the employee to respond
Considering their feedback
Exploring whether improvement is achievable
Making a reasonable decision
A probation period does not allow you to dismiss an employee “on the spot” or without process. Employees on probation have the same rights as any other employee, including the ability to raise a personal grievance for unjustified dismissal.
What Is a Trial Period?
A trial period is a tool that lets you “try out” a new employee for up to the first 90 calendar days of their employment. If it’s not working out, you can end the employment during the trial period without the employee being able to raise a personal grievance for unjustified dismissal, as long as the trial is valid and used correctly.
Key rules:
· You can only use a trial period:
· For a new employee who has never worked for you before (not even casually or a few days)
· If the clause is in the written employment agreement
· If the employee signs the agreement before starting work
· The agreement must clearly state:
· That it is a trial period under the Employment Relations Act
· The length of the trial (up to 90 calendar days)
· The date the trial period commences (usually the start date)
· What notice applies if you end employment during the trial
· You must still:
· Act in good faith
· Pay all minimum entitlements
· Comply with all other employment laws (e.g. no discrimination, harassment, unjustified disadvantage)
Important note: you cannot use a trial period for employees on an Accredited Employer Work Visa (AEWV).
The Most Common Mistake Employers Make
Many employers think a probation period lets them “try someone out” and dismiss them easily. It doesn’t.
A probation period is not a shortcut to removing an employee. It simply helps structure early performance expectations and support.
Likewise, employers sometimes assume they have a valid trial period only to discover:
The agreement was signed after the start date
The clause wasn’t worded correctly
The commencement date of the trial period was not recorded
The employee wasn’t genuinely new to the organisation
Any of these issues can invalidate the trial period, meaning a termination could be challenged.
Getting probation and trial periods wrong can lead to costly personal grievances. If you’re unsure whether your clauses are valid or need help updating your employment agreements, proHR can help. We work with employers every day to ensure compliance, clarity, and confidence when hiring.
