Dismissing an employee during a 90-day trial period with payment in lieu of work for a notice period is not summary dismissal, the Court of Appeal ruled.
Engineer Calin Iaon failed in an Employment Relations Act claim against Dunedin-based Scott Technology NZ Ltd. The Court of Appeal was told Mr Iaon suggested when hired that he be offered a 90-day trial after concerns were expressed about potential difficulties he might have in getting on with others. His trial agreement provided for four weeks written notice. He was dismissed in October 2016, with just over three weeks still to run on his 90-day contract. In its termination letter, Scott Technologies described Mr Iaon as a capable experienced and practical engineer, stating there was a mismatch between the characteristics required for a senior role and what was delivered.
The Court of Appeal ruled ‘termination on notice’ includes circumstances where a notice period is paid out with immediate cessation of work. Mr Ioan’s claim of unjustifiable dismissal failed.
Under current legislation, use of 90-day employment trials is limited to employers with fewer than twenty employees.
Ioan v. Scott Technology NZ Ltd – Court of Appeal (27.08.19)
19.154