Pre-Employment Work Trials – Working for a Day without Pay?

Work trials.  Are they legal? Yes, but only in certain circumstances.

The recent case of Mawhinney v Sfizio Ltd [2019] NZERA49 is a perfect example of when a work trial was not considered legal.   Having a prospective employee undertake a non-compliant work trial can be costly, and rather than paying no wages, you could be stung with paying over $9,000.00 for a day’s wages, which is what happened in this case.

In August 2017 Ms. Mawhinney responded to an advert for a barista with Sfizio Ltd, who have two cafes in Wellington.  She came in for an interview with the two directors, and subsequently made them 3 coffees to test out her skills.  At the end of the interview, the directors advised Ms. Mawhinney she was a good fit and asked her to come in the following day for a full shift.   Ms. Mawhinney was under the impression she had been offered the job and agreed.

Having worked a full day from 8-4pm the following day, Ms. Mawhinney asked the director whether she should send through her account number for payment for the day’s work.  The director responded with, “oh, did Curtis not tell you? This was an unpaid trial.” Ms. Mawhinney was upset, and explained that she had incurred travel and child care costs, and wouldn’t have done it if it were an unpaid trial.  The director texted later that night offering her a job, but reiterating that it was unpaid trial that day. Ms. Mawhinney declined the job offer, and said she wanted to be paid for the day’s work.

The matter ended up in the Employment Relations Authority, where the directors’ disputed that Ms. Mawhinney was not aware it was an unpaid work trial.  They argued competency assessments were standard practice and that Ms. Mawhinney was not a productive member of the team, therefore it was a valid work trial.  The Authority disagreed; firstly it held that it was not clear that it was an unpaid work trial, but even if it was, it was not a legal one.  Ms. Mawhinney had worked independently and had prepared food, made coffees, completed sale transactions, and delivered food and beverages to customers.

The Authority referenced The Salad Bowl Ltd v Howe-Thornley, where the Employment Court found the person on trial had become an employee because she had done more than simply observe the operation or even undertake practical tests.  Rather than undertake, the individual had “actually performed the work that needed to be undertaken in the business …”  Overall, the Authority held that in this case, Ms Mawhinney had provided an economic benefit to the café, and that the line had been crossed between a competency assessment and work.

Accordingly, Ms. Mawhinney was considered an employee and was awarded payment for the day’s work, four weeks lost wages and compensation, totaling just over $9,000.00.

What are the key take-away points from this case?

  • Keep the work trial short and only what is necessary to obtain an appreciation of his/her abilities;
  • Ensure that the tasks being undertaken by the person are not providing any economic benefit to the business;
  • Ensure the individual is very clear that it will be an unpaid work trial to ensure no confusion; and
  • Ensure the individual understands that it is part of the recruitment process and any offer of employment will be conditional on the satisfactory completion of the work trial.

Workplace Law Team

If you have any queries in respect of the above, or any other workplace law issues, please contact a member of Lane Neave’s Workplace Law Team:

Employment: Andrew Shaw, Fiona McMillan, Kathryn McKinney, Siobhan Rastrick, Hannah Martin; Holly Struckman; Anna Needham; Alex Beal
Immigration: Mark Williams, Rachael Mason, Nicky Robertson, Hetish Lochan, Daniel Kruger, Julia Strickett, Rita Worner, Lavinia Shanks, Winnie Chen, Caroline Edwards, Ken Huang, Sally Stone, Mary Zhou, Sarah Kirkwwood, Lingbo Yu
ACC: Andrew Shaw
Health and Safety: Andrew ShawFiona McMillan

Contact

Andrew Shaw
Partner, Lane Neave

t +64 3 353 8014
m +64 29 244 9001
e andrew.shaw@laneneave.co.nz

Fiona McMillan
Partner, Lane Neave

t +64 9 300 6264
m +64 27 351 2000
e fiona.mcmillan@laneneave.co.nz

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