Wellington Lawyers: Unjustified Fixed-Term Contract Leads to Unjustified Dismissal

WELLINGTON, New Zealand - Feb. 25, 2025 - PRLog -- Employment contracts play a crucial role in defining the rights and obligations of both employers and employees. A recent Employment Relations Authority (ERA) decision highlights the risks of unjustified fixed-term contracts, leading to an employee's claim of unjustified dismissal.

At Core Legal Masterton & Wellington, we help both employers and employees navigate complex employment law issues, including the proper use of trial periods and fixed-term agreements.

Background of the Case

An employee was initially hired under an employment agreement with a 90-day trial period. The employer terminated her within the trial period and then offered her a fixed-term contract while she searched for another job. The fixed-term contract expired after two months.

The employee later raised two personal grievance claims for unjustified dismissal. The ERA considered both claims separately:

1. Unjustified dismissal under the 90-day trial period
2. Unjustified dismissal due to the fixed-term contract's expiry

The 90-Day Trial Period Was Valid

The employee argued that the 90-day trial period was invalid because she had previously performed work-related tasks during her job interviews, including assisting customers.

However, the ERA ruled that the trial period was valid because:

• The work-related tasks were part of the interview process to assess her skills, not formal employment.
• She did not expect payment for the tasks performed during the interview.

As a result, her claim for unjustified dismissal based on the trial period clause was dismissed.

The Fixed-Term Contract Was Unjustified

The ERA then considered whether the fixed-term contract was legally justified. Under New Zealand employment law, fixed-term contracts must have a genuine reason and cannot be used to:

• Limit employee rights under the Employment Relations Act.
• Test an employee's suitability for permanent employment.
• Avoid obligations under the Holidays Act. https://www.corelegal.co.nz