Employers say Ninety-Day Trial unequivocal

While employers in general have hailed the ‘Ninety-Day Trial Period’ during which they can terminate an employment contract without the obligation of terminal benefits as fair and practical, trade unions and the Labour Party have slammed it as unilateral and arm-twisting.

The law empowering companies with 19 or fewer employees to dispense with the services of new employees after 90 days of their continuous employment came into effect on March 1, 2009. The Government claims that the practice has worked well and that it had encouraged many companies to employ new staff without fear of being dragged to employment courts for ‘unfair dismissal.’

Prime Minister John Key announced at the National Party Conference in Auckland on July 17 that the scheme would be extended to all companies irrespective of the staff strength as a part of the changes to the Employment Relations Act 2000.

“It is about giving prospective employees a shot at work and giving employers the confidence to hire. Britain, Australia and many other countries have similar policies,” he told the delegates attending the conference at the Sky City Convention Centre.

Mr Key said the 90-day trial system improved employer confidence and encouraged more people to enter the job market.

Endorsing his views, Labour Minister Kate Wilkinson said a Labour Department evaluation had shown the benefits accruing to the economy.

“There are a lot of people looking for work and the changes announced will help boost employer confidence and encourage them to take on more staff.

“More than 40% of employers who had hired someone on a trial period said it was unlikely they would have taken on new employees without such a facility. Trial periods were introduced to encourage employers to take on new staff,” she said.

According to Ms Wilkinson, 74% of staff employed on trial basis continued in their job after the 90-day period.

“It is clear that the law is a win-win for employers and employees,” she said.

But Labour Party Ethnic Affairs Associate Spokesperson Dr Ashraf Choudhary attacked the extension of the law to all employers saying that it would disadvantage migrant workers.

“It is already common for migrants to feel discrimination, exclusion and prejudice when they arrive in a new country and enter employment.

“I do not see how the 90-day-trial and lack of union representation will do anything other than make things worse,” he said.

He described the statute as ‘Fire-at-Will Law,’ saying that it would intimidate the refugee population and force them to suffer in silence.

“Newcomers need time to adjust to the environment, language barriers and the demands of their new job. Migration involves profound loss and stress for families,” Dr Choudhary said.

He said the law provided ‘potential’ for some employers to hire and fire international students who are allowed to work 20 hours per week.

However, complaints received by Indian Newslink over the past few years indicate that such unhealthy practices have been prevalent since long and the Labour Department is impervious to complaints.

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1. John Key: Employer-employee relationship must be robust

2. Dr Ashraf Choudhary: Migrant workers will suffer