90-Day trials welcomed - another handy tool
Most local hospitality and restaurant operators have welcomed the option of 90-day trial periods now extended to all employers, no matter what their size, as another tool to help attract and retain quality staff.
The trial option provides employers with greater confidence when hiring new employees and must be agreed to by both parties in writing before the employee starts work as part of their employment agreement.
A recent survey of NZ Restaurant Association members found 62% cited the reintroduction of 90-day trials to facilitate hiring and operational flexibility as “a top priority”, association CEO Marisa Bidois says.
The association has had “an influx of calls” on implementing trial periods coming in on its advice line from people that haven’t used them before.
“It gives some safety net for employers to test the suitability of an applicant for a role,” she says. Trial periods also allow the employee to test whether the workplace is right for them as the notice period is usually shorter.
Employers can assess an individual's fit within the company and their ability to adapt and grow into the position, she says.
The 90-day trial periods do require careful navigation though to ensure compliance and reduce risk.
Employers must clearly communicate trial terms in writing in the employment agreement before employment starts, treat employees fairly, comply with all legal requirements, and maintain thorough documentation. “There are a lot of technical requirements to the validity of a trial period and it’s important that employers are aware of these,” she says.
Employers need to ensure there is a valid trial period to begin with, for example, that the employee has not worked for them in the past.
New Zealand employment law regulations also require the employer to inform the employee (prior to employment) that they are on a trial period, which can be through the employment agreement, but also in a letter of offer.
Another catch as of recent times is that 90-day trials do not apply to migrant employees on an accredited employer work visa [AEWV], something Queenstown Lakes employers need to be especially aware of.
Employment legislation can be complex and any business with questions should contact the association for clarification, Bidois says.
A post-election poll also found that a substantial 80% of members classed the repeal of the Fair Pay Agreements legislation as “a critical priority” for the new Government, underscoring its importance to the restaurant sector, she says.
“Compulsory Fair Pay Agreements (FPAs) are seen as outdated, rigid, and not in line with the realities of modern workforces, potentially exacerbating compliance pressures for employers.”
This could lead to increased prices and adversely affect those the FPAs intend to protect, Bidois says. “In an era that demands adaptability, flexibility, and speed from workplaces, FPAs do not reflect the needs of businesses and employers.”
Frankton’s Odelay Café owner Ed Devereux says he thinks the 90-day trial periods are helping local employers who’ve been so short staffed and forced to pay higher wages. “It’s been well received,” he says. Fair Pay Agreements were “a joke” as market demand was forcing pay rates up anyway, he says.
“Show me any hospitality staff in this town who aren’t swayed by wage price. I’m going through 70% of my staff every three months. They decide to leave and travel as they can’t afford to live in Queenstown,” Devereux says.
The lure of Australia is also still big.
“We’re still managing to navigate it, but it takes a lot of work to keep them on board and keep them happy.”
He’s noticed the number of applicants is up but the quality is poor so the 90-day trial period will greatly assist there. However, he’s employed 160 staff in seven years and never had to implement it.
There’s also been an enormous influx in Argentinians arriving to work in Queenstown, he says.
The Rees CEO Mark Rose says while the 90-day trial is a handy tool used in the right way, he fortunately hasn’t needed to use it. His biggest problem is training new staff in the expectation that they’re staying for a year, only to find after six weeks that’s not their intention, he says.
He was fully supportive of the Fair Pay Agreements and suspects any operators opposed may have wanted to suppress wages. “We want to drive revenue up, so we need good people working for us,” he says.
Queenstown CAB general manager Tracy Poole says there are still good processes and procedures to follow to ensure both employers and employees are protected under 90-day trials. “These ensure employees are set up to succeed and not fail,” she says.
