HR Practice For Payroll Practitioners

HR Practice for Payroll Practitioners

Termination when an employee is on a trial period

The purpose of a trial provision is to give a person who may not normally be offered a job of this type, the chance of employment.

This goes both ways because the employer can terminate the employee's employment without the penalty of unjustified dismissal if things do not work out. The key deadline for the employer is 90 days to terminate the employee. If it goes past that, then the ability to terminate under the 90-day trial ends, and the employee could challenge a termination as unjustified dismissal.

If an employee is terminated, what does payroll pay?

• This type of termination does involve a notice period being paid.

• Any other payment that has been agreed.

• All taxable payments on termination will be part of gross earnings, which will be based on 8% for leave. This depends on whether “ Pay As You Go (PAYG) ” has been used. If it has, then the last 8% for the last pay period is paid (including the notice period). Or if PAYG you go was not used then the 8% on termination will be based on the gross for the whole period.

For additional information, look at this EmploymentNZ reference: https://www.employment.govt.nz/starting-employment/trial-and probationary-periods/

© New Zealand Payroll Practitioners Association, Sep 2024, Ver 12

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