PRE-EMPLOYMENT ‘TRIALS’ – is the candidate really an employee?

General / 25 October 2015
PRE-EMPLOYMENT ‘TRIALS’ – is the candidate really an employee?

The Employment Court had to decide in Salad Bowl Ltd v Howe-Thornley 2013 EmpC 152 whether a potential employee who completed a 3 hour trial should be considered employed by the business.
Ms Howe-Thornley applied for a job with the Salad Bowl Limited.  Following an interview she was to serve a 3 hour work trial to see if she could multi-task efficiently. After her work trial the till was short by $50.  Ms Westphal, owner of the Salad Bowl, thought a $50 note that she saw earlier in the till was no longer there. Ms Westphal rung Ms Howe-Thornley’s referees and asked about her general honesty as an employee.  The referees’ answer caused her concern.  Ms Westphal texted Ms Howe-Thornley that there was no job due to the money missing from the till.
The line may be crossed from a person being a  potential employee to an employee, and an employment relationship may arise, when the employer gains an economic or business benefit from the work trial.  Though the business benefit to the employer may not be optimal  due to Ms Howe-Thornley needing to be shown what to do, she nevertheless was performing work and contributing to its business.
Was the work trial “employment”?
The Court looked at the definition of an “employee” which includes “a person intending to work” and a person who has been offered, and accepted, work as an employee. The evidence established that The Salad Bowl had intended to pay Ms Howe-Thornley for her work during the trial. The Court found that she had been offered and accepted work as an employee, even if it was for a short period and that she performed work and contributed to The Salad Bowl’s business.
Can the Salad Bowl argue that the trial was fixed term employment?
Ms Westphal offered Ms Howe-Thornley employment of a fixed duration which would end when she communicated the Salad Bowl’s decision whether to engage her permanently. The Salad Bowl breached section 66 of the Act as the reason for the fixed term was not genuine. An employer may not use a fixed term agreement if it is for the purpose of establishing the suitability of the employee for permanent employment.   The consequence of breaching section 66 is that the Salad Bowl was not entitled to terminate the employment in reliance upon the expiry of the fixed term and the employment is deemed permanent.
If it’s not fixed term employment is it conditional employment?
The Court said even if Ms Howe-Thornley’s employment was conditional on satisfactory completion of the trial and a reference check,  the Salad Bowl still can not avoid liability for unjustified dismissal solely upon its conclusion that she failed to satisfy either or both conditions. The Salad Bowl, in good faith, must  have at least raised its suspicions or concerns with her and given her an opportunity to address these before dismissing her summarily in reliance upon them.  It was not entitled, in the process of fulfilling those conditions, to disadvantage or dismiss her unjustifiably.

HELD:     Ms Howe-Thornley was an employee of the Salad Bowl and was unjustifiably dismissed.  She was awarded $1,215 for lost wages and $5000 compensation.
EFFECT:  Pre-employment trial periods, to avoid risk,  should be  undertaken  under a valid  trial  period that is compliant with section 67A and 67B of the Act. This will especially be the  case where the business receives economic benefits from the candidates trial.

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