An update – trial periods and payments in lieu of notice
An interesting trial period case has been considered by the Court of Appeal recently with surprisingly positive results for employers! Making payments in lieu of notice when terminating an employment agreement under the trial period has always been risky. The law surrounding this practise has been unclear, and we have always advised against it.
However, in the case of Loan v Scott Technology NZ Ltd, the Employment Court examined the unique circumstances of this trial period dismissal and found that the payment made in lieu of notice satisfied the requirements of ‘giving notice’ for the purposes of section 67B(1) of the Employment Relations Act. The Court of Appeal agreed.
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