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New Zealand – 90-day trial employment period criticised

06 December 2013

The New Zealand Ministry of Business, Innovation & Employment (BIE) allows employers to make an offer of employment that includes a trial period of up to 90 days. Trial periods are voluntary, and must be agreed in writing and negotiated in good faith as part of the employment agreement. Figures published by the BIE about 69,000 employers took on at least one new staff member in 2012 under the legislation.

According to the BIE, an employee who is dismissed before the end of a trial period cannot raise a personal grievance on the grounds of unjustified dismissal. They can raise a personal grievance on other grounds, such as discrimination or harassment or unjustified action by the employer.

It has since been revealed that tens of thousands of workers have been sacked under the 90-day-trial employment period, with many let go because they "did not fit in", leaving these people with no legal recourse, reports stuff.co.nz

It is not known how many workers were dismissed during the 90-day-trial period, but the figures show that 27% of employers said they had fired at least one new employee during or at the end of their trial. This means at least 18,000 people lost their jobs in the first three months of employment last year, with the actual figure likely to be much higher.

When asked why they had dismissed staff, most employers said it was because they were unreliable or had a bad attitude. Other reasons included employees not having the necessary skills, not getting on with colleagues, and not fitting in.

The law has been widely criticised by unions and the Labour Party, which says it will repeal it if it is elected next year.

However, Hospitality New Zealand Wellington president Jeremy Smith praised the trial period, claiming it had been positive for both employers and employees.

Mr Smith said he had hired dozens of staff he would not otherwise have considered. Due of the transient nature of hospitality, it was often difficult to check references so a trial period "levelled the playing field".

"We're in a position now where we're a lot more comfortable giving people an opportunity," he said.

Jeff Sissons General Counsel of the Council of Trade Unions disagrees, saying that more than two years after the law was introduced, workers were still contacting the union complaining they had been fired unfairly while on a trial period.

“If an employer went through a proper and robust hiring process, there was no need for a trial,” he said.

Labour Minister Simon Bridges believed the legislation was working well. According to Mr Bridges, in 2012, more than 131,000 people were employed on a trial period and nearly a third of all employers who used the trial period said they would not have hired their newest staff member without it.

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