The following changes in the Employment Relations Amendment Act 2008 took effect on 1 March 2009.

According to this amendment, employers with fewer than 20 employees can dismiss new staff in their trial period without fear of personal grievance or legal action. This applies if the notice of dismissal was given within the initial 90 day period of employment, regardless of whether their final day of employment falls inside or outside of this period.

The trial period cannot be longer than 90 days and the personal grievance exemption only counts the first time an employee is employed by the company (thus preventing employers from repeatedly hiring and firing an employee for 90 days at a time).

Employees can still lodge a personal grievance for other matters such as sexual harassment or discrimination, just not for being unjustifiably dismissed.  Employees and employers can still use the mediation service provided by the department of Labour.

The government has also removed the benefit stand-down period for those who are dismissed under these circumstances.

Here's how it works...

You are only affected if you employ fewer than 20 employees.  The trial period must be in the employment agreement, negotiated between the parties and is not retrospective.  It’s only real effect is to allow an employer to terminate the employee s during or at the end of the 90 calendar day period without fear of a personal grievance for unjustified dismissal.  However, this does not stop an employee taking a grievance for harassment, disadvantage nor indeed for serious breach of good faith. 

This law has been passed quickly and there may be a number of issues that will need to be ironed out, probably by precedent. 

You must remember to give notice of termination before the end of the trial period.  If the notice period expires after the 90 day period the employee will still not be able to take a grievance for unjustified dismissal but any new dismissal during the notice period would attract the usual rights. 

The obligations of good faith remain in tact but your obligations to consult and provide information prior to dismissal have been removed.   

You can have both a trial period and the existing probationary period.  The existing probationary period can be of any length and have a different notice period, but it does attract the right to a personal grievance.

Employees terminated under the trail period will still be able to make claims for unjustified disadvantage.