The objective of this Bill is to enable businesses that have 20 or more employees to include a 90-day trial period in a new employee’s employment agreement.

Any risks that are associated with hiring a new employee exist regardless of the number of employees a business has, and the inability of larger businesses to include a 90-day trial period can result in job seekers not being offered employment if risks – perceived or otherwise – outweigh the benefit to the employer. It is arguably unjustifiable that only small-to-medium-sized businesses, as defined by the Act, can mitigate risks using a 90-day trial period.

The Bill achieves its objective by amending sections 67A and 67B of the Employment Relations Act 2000, removing the references to small-to-medium sized businesses and their definition.

Clause by clause analysis

Clause 1 is the title clause.

Clause 2 is the commencement clause and provides for the Bill to come into force on the day after Royal assent.

Clause 3 identifies the Employment Relations Act 2000 as the Act being amended by the Bill (the principal Act).

Clause 4 amends section 67A of the principal Act, which sets out when an employment agreement may contain a provision for a trial period of 90 days or less (a trial period). The effect of the amendment to section 67A is to enable any employer to enter into an employment agreement that contains a trial period. Currently, only employers with fewer than 20 employees may enter into such agreements.

Clause 5 contains consequential amendments to section 67B of the principal Act to reflect the amendments to section 67A made by clause 4.

Dr James McDowall

Employment Relations (Trial Periods) Amendment Bill

Member’s Bill

290—1

	Explanatory note
1	Title
2	Commencement
3	Principal Act
4	Section 67A replaced (When employment agreement may contain provision for trial period for 90 days or less)
	67A	Employment agreement may contain provision for trial period for 90 days or less
5	Section 67B amended ((Effect of trial provision under section 67A)

The Parliament of New Zealand enacts as follows:

1 Title

This Act is the Employment Relations (Trial Periods) Amendment Act 2023.

2 Commencement

This Act comes into force on the day after the date on which it receives the Royal assent.

3 Principal Act

This Act amends the Employment Relations Act 2000.

4 Section 67A replaced (When employment agreement may contain provision for trial period for 90 days or less)

Replace section 67A with:

67A Employment agreement may contain provision for trial period for 90 days or less

(1)

An employment agreement containing a trial provision may be entered into by an employer and an employee who has not previously been employed by that employer.

(2)

For the purposes of this section and section 67B, 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; and

(b)

during that period, the employer may dismiss the employee; and

(c)

if the employer does so, the employee is not entitled to bring a personal grievance or other legal proceedings in respect of the dismissal.

5 Section 67B amended ((Effect of trial provision under section 67A)

(1)

In section 67B(1), replace “a small-to-medium-sized employer” with “an employer”.

(2)

In section 67B(5)(a) and (b), replace “small-to-medium-sized employer” with “employer”.

Employment Relations (Trial Periods) Amendment Bill