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Dr Wayne Mapp: Employment Law Alert

1 March 2006

Later this month, 15 March, the Parliament will be debating the merits of a probation period for new employees. This is because my Member's Bill has been drawn from the ballot.

The Employment Relations (Probationary Employment) Amendment Bill seeks to reduce barriers to employment by establishing a 90-day probationary period for new employer-employee relationships, enabling either party to walk away from the agreement if they are not satisfied, without the threat of personal grievance procedures taking place.

A probationary period of employment for new workers was one of the key recommendations of the Government's small business advisory group, which described probationary periods as the 'single most important change that could be made to employment legislation', and went on to say that 'they would lead directly and immediately to employment and business growth'.

Business New Zealand, in its publication "Skills Perspectives", stressed the importance of probationary periods as a critical step to help drive a competitive, growing economy.

Labour will now have to deal with this issue. They can help workers and businesses by allowing the bill to go to select committee. If they refuse, they will be properly blamed for being anti-business and anti-growth.

The bill will help new workers. It will enable people who might otherwise be on the margins of the labour force to get a foot in the door. In effect, it will provide a chance for those who find getting that first job difficult, like new migrants, young people with few qualifications and people re-entering the workforce.

At the moment, many employers - especially those running smaller operations - are reluctant to take a chance and hire people for fear of facing expensive and protracted personal grievance procedures.

Ninety-day probation periods are the norm in the OECD. In Britain it is 12 months, in Australia it is three months. The OECD has said it is time for New Zealand to change the law, this would show we're serious about economic growth and enhancing employment opportunities.

This bill will be a real test for the various parties in Parliament as to whether or not they are really committed to boosting New Zealand's productivity and competitiveness, relative to Australia and other comparative countries. You can read the bill here .


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