Probationary Periods – A valuable contributor in the HR toolbox

With many NZ employers no longer having the option to use a Trial Period it is time to update and refresh our skills in the use of Probationary Periods – a timely reminder of the valuable contribution this HR tool can make in managing new employees.
The Probationary Period:
  • gives you, as the employer, the opportunity to assess the employee’s skills for the role
  • must be recorded in an appropriate clause in the Individual Employment Agreement (IEA)
  • duration (usually 90 days) must be recorded in the IEA
  • is valid where the IEA is signed pre-employment
  • can be extended, in writing, if deemed as necessary and appropriate
  • is NOT a free work trial
  • does not limit the employer and employee’s rights and obligations
  • includes an action plan of support, training and feedback with the employee knowing what this plan contains and how it will be managed
During the Probationary Period the employer must follow a fair process including:
  • consistently providing good quality support and training appropriate to the role
  • regularly meeting with the employee to review and discuss their progress and performance
  • advising the employee where they are doing well and where improvement is needed
  • communicating and recording any ongoing action plan to assist with meeting the expectations
  • keeping file notes or records of the performance review meetings and discussions
  • giving the employee a fair and reasonable opportunity to improve
At the conclusion of the probation period:

If the employee’s performance is satisfactory – let the employee know and confirm their position. The employment continues automatically on the existing terms and conditions of employment, so no additional variation of the IEA is required.

If the work hasn’t gone well – An employer can’t simply tell an employee to leave their job at the end of the probation period, as may have occurred under the terms of a Trial Period. The employer must have assessed the employee fairly and, if their work wasn’t good enough, they must tell the employee why it was not good enough.

The employer must give the employee an opportunity to respond to the performance concerns. If, after considering any response, the employer decides to end the employee’s employment, it is best practice to follow a fair and reasonable HR process.

Seek advice and use an HR professional to assist you with any termination process to guide and support your business, thus minimising risk and promoting a positive outcome.

Points to Remember:
  • a probationary period must be recorded in the IEA
  • you must have, and be able to show, valid reasons for dismissing an employee
  • you must provide training and support to work with the employee to meet their performance targets
  • you must conduct fair, appropriate and regular assessment during the probationary period
  • you must follow HR best practice in the dismissal process
  • an employee can raise a personal grievance for unfair dismissal
  • don’t use a fixed term contract in place of a probationary period – to hire an employee on a fixed-term contract there must be a genuine reason for the role to only last a certain period of time
  • seek advice from an HR Professional to support and assist you with managing employees and Probationary Periods


Author | Michelle Jeans

Author | Michelle Jeans

HR Partner

Michelle has a strong, practical experienced portfolio in Employment Relations and Change Management, complemented by a sound HR Generalist skill set. This broad and comprehensive combination of skills and experience enables Michelle to offer your business tailored, solutions focussed, HR support.

AdviceFirst is a Financial Advice Provider (FSP23242).