Trial period dismissal challenged


Mr Ioan claimed that he was unjustifiably dismissed from his employment with Scott Technology NZ Limited t/a Rocklabs (“Rocklabs”) on 7 October 2016. Rocklabs maintained that it terminated Mr Ioan’s employment under a valid 90 day trial period. 

Mr Ioan began working for Rocklabs on 18 July 2016. On 5 October Mr Ioan received a letter from Rocklabs regarding concerns about his performance. The letter also proposed to end his employment under the 90 day trial period clause in his employment agreement. Mr Ioan was invited to provide feedback about the proposal by 3pm on 7 October. Mr Ioan responded to the letter the following day and in a subsequent meeting on 7 October he made it clear that he wished to continue working for Rocklabs. The meeting was adjourned and later that day Mr Ioan was dismissed in writing under the trial period. The letter stated that the dismissal was effective that day and that he would be paid in lieu of notice.

A valid 90 day trial clause prohibits an employee from bringing a personal grievance for an unjustified dismissal. Mr Ioan argued that because the good faith obligation to seek an employee’s comment before making a decision does not apply to dismissal under a trial period, Rocklabs’ proposal to terminate his employment invalidated the trial provision. The Authority did not accept that an employer who attempts to engage with an employee it is proposing to dismiss under a trial period would invalidate its right to rely on the trial period to end the employment.

Mr Ioan also claimed that Rocklabs ended his employment immediately by paying him in lieu of notice. This, he claimed, meant that he was not given advice of when in the future his dismissal would take place contrary to the requirements of the trial period provisions in the Employment Relations Act 2000 (“the Act”). The Authority did not accept Mr Ioan’s argument that he was not told at what future date his employment would end because the dismissal letter stated it would end that day. 

The trial period provisions in the Act refer to an employer dismissing by giving notice of termination. There was no specific notice period in the trial period clause in Mr Ioan’s employment agreement. The Authority concluded that Rocklabs was entitled to rely on the separate notice provision in the employment agreement, which the Authority interpreted as meaning Rocklabs could pay in lieu of notice. The Authority accepted that Rocklabs was able to pay in lieu of notice, in accordance with an express contractual term in the employment agreement, and that did not void the trial period.

The Authority concluded that Rocklabs lawfully terminated Mr Ioan under a valid trial period, therefore Mr Ioan was unable to raise a personal grievance in respect of the dismissal. 

Ioan v Scott Technology NZ Limited [[2017] NZERA Auckland 106; 10/04/2017; R Larmer]


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