Employee Successful in Trial Period Challenge

Ms Singh worked as a quality insurance tester for Ora HQ Limited (“Ora”) for 78 days before being dismissed under a trial period provision in her employment agreement. Ms Singh did not challenge the dismissal.

However, she claimed that the failure by Ora to comply with part of its own trial period clause caused her an unjustified disadvantage. Clause 28.6 of Ms Singh’s employment agreement stated: “The employer is not required to give you reasons for your dismissal but, in good faith, will advise you as early as practicable if the trial period is not going well.”

The Authority noted that Clause 28.6 “expressly recognised” the general duty of good faith to be productive, communicative, active and constructive in maintaining a productive employment relationship. Ms Singh claimed she was not given any advice about the trial period before she was dismissed.

Ora claimed that Ms Singh received feedback about her performance on various occasions from her manager Mr Wood.

It is accepted that an employee dismissed under a trial period may still pursue a grievance on other grounds such as disadvantage, discrimination or harassment. Mr Wood said that he told Ms Singh on 13 August that her employment was “on the line”. This was during a one-month review which occurred on the street outside Ora’s offices.

The Authority concluded that Ms Singh did not have negative aspects of her work sufficiently highlighted so that she would have known or should have known that the trial period was “not going well”.

Ora’s failure was to Ms Singh’s disadvantage as it denied her the opportunity to properly understand and to attempt to remedy any perceived shortcomings in her work.

The Authority upheld Ms Singh’s personal grievance for unjustified disadvantage.

Ms Singh was not entitled to lost wages. Although the Authority considered that an assessment of lost wages was possible, it would have required a calculation of the chances that Ms Singh would have improved her performance so Ora would have changed its decision to dismiss. Such an assessment was not feasible on the evidence available.

There was also no evidence of humiliation, injury to feelings or loss of dignity however Ora was ordered to pay a penalty to Ms Singh of $7,000 for breach of the employment agreement.

Learnings: This case reinforces the need for employers to meet the obligations of their employment agreements. It also serves as a reminder that good faith obligations still apply during trial periods. Although not addressed in this case, it is still potentially possible for an unjustified disadvantage claim for a breach of good faith to be successful during a trial period.

Note also that although an employer is not required to give a reason for dismissal in writing under the trial period, good faith obligations mean that an employee should be told verbally the reasons.