90-DAY TRIAL PERIOD
AN INDUSTRY OPPORTUNITY

Since March 2009, companies with fewer than 20 employees have had the opportunity to hire staff under a 90-day trial period arrangement, without fear of a personal grievance claim (in all but discriminatory or harassment situations) should the employer decide to terminate that employment within the trial period. Currently, there is a Bill before Parliament [Employment Relations Amendment Bill (No 2)] that will extend the 90-day trial scheme to all companies, regardless of size. It is expected to become law in November 2010.

Government enacted the 90-day-trial amendment to the Employment Relations Act 2000 as an encouragement to employers to take on new staff, particularly from groups that face higher levels of labour market disadvantage. "By lowering the legal risks employers face, they will be more confident in giving people the opportunity to prove themselves," Labour Minister, Kate Wilkinson, said.

While the jury is still out on whether the aims of the Act are being met, employers should perceive the scheme as an opportunity to bring on high-potential staff they might otherwise shy away from - e.g., new grads, immigrants, older workers. This opportunity comes with a caveat, however; the "good faith" provisions of the Employment Relations Act 2000 are firmly embedded in the trial period language.

In any industry, there are those employers who win awards for "best place to work" and others who find themselves in the news because of shoddy employment practices. Most companies fall somewhere between these two extremes. It is in this middle ground that the fashion industry can excel.

It is critical that employers approach the 90-day trial period with integrity and good faith. During the trial period the employee should be treated with respect, propped up and given a fair chance to succeed. It would be all too easy to take a "sink or swim" attitude and focus only on the short term. It is the potential long-term impact of an employee's performance that should matter most.

What the trial period enables you to do is evaluate employees' potential, to learn from their perspective and to train them not only in your company but also in the industry as a whole. It is unfair to expect a new employee to perform miracles in the early stages of her employment. Even the most senior executives need at least 90 days to find their way around a new company and to start making an impact. Your trial period evaluation should include the employee's aptitude and attitude in addition to your assessment of direct performance.

Good faith (and good management practice) implies that you have a regular dialogue with that employee about her progress and how she's stacking up against expectations. It would be poor practice to terminate employment during the trial period without providing a candid explanation and some words of advice.

There will be those companies who negatively take advantage of the new legislation. The worst for us would be for a few companies to abuse the 90-day trail, perceiving it as a "fire-at-will" scheme, and paint the whole fashion industry with that negativity. The 90-day scheme is not a substitute to counteract poor hiring practices. Instead it is an opportunity to think outside the square, give folks a chance and build a solid, trained workforce to take our industry successfully into the future.

Submitted by Managing Director, Gaye Harford in collaboration with Lorraine Warshaw