90-day trial period to provide job opportunities
Hon Kate Wilkinson
Minister of Labour
10 December 2008 Media
Statement
90-day trial period to provide job opportunities
Trial employment periods for up to 90 days for workplaces with fewer than 20 employees will be available from April 2009, the Minister of Labour, Hon Kate Wilkinson, announced today.
Legislation is being introduced to the House today and will be progressed through all stages.
“Across the board, the Government is moving decisively to mitigate the effects of the global economic troubles and position New Zealand for higher growth in the long term. The 90-day trial period is an integral part of that response.
“By lowering the legal risks employers face, they will be more confident in giving people the opportunity to prove themselves,” she says.
“Existing legislation exposes smaller businesses to the risk of costly employment action if an employment relationship does not work out, and discourages them from taking on new staff.
“For years small businesses have been calling for a trial period to solve this problem. The issue has previously been the subject of thorough consultation but real action has been stymied.
“The 90-day trial period will provide confidence for employers engaging new staff and allow struggling job-seekers to get their foot in the door, rather than languish on a benefit.
“Rigid employment law has the most damaging effect on people at the margins of the labour market. Long-term unemployed people, young people, people returning after absences for childrearing or sickness, people with disabilities or mental illness, migrants, people with overseas qualifications, and people with convictions all suffer disproportionately when employment law is inflexible.
“The 90-day trial will provide real opportunities for people at the margins of the labour market.
“We are encouraging beneficiaries to pursue employment opportunities and have ensured they are not disadvantaged for doing so. If a beneficiary enters a trial period and the job does not work out through no fault of their own, they will not face a stand-down before receiving the benefit again.
“We have listened to concerns raised previously and the Bill includes new safety mechanisms to protect workers.
“The trial period will also be covered by good faith provisions, meaning that employees will need to be fully informed about the trial period before agreeing to a trial period. Mediation will be available in cases of dispute.
“Employees will retain all other rights including those relating to pay, conditions, leave, and health and safety.
“Employees will still be able to take a personal grievance under the discrimination provisions of the Employment Relations Act through the Employment Relations Authority or Employment Court.
“This change brings us into line with the vast majority of OECD countries, where trial periods are an established part of employment law.”
ENDS
Attached: Q & A on 90-day trial employment periods – 2 pages.
90-day trial period questions and
answers:
Q: Is the trial period fixed at 90
days?
A: No. The trial period can be any number of days
up to and including 90 days.
Q: What does a 90 day trial
period mean?
A: It means that an employer and employee
can enter into an agreement that, for the specified and
agreed number of days, the employer can dismiss the employee
without the employee being able to take a personal grievance
for reasons of unfair dismissal. All other aspects of the
Employment Relations Act 2000 still apply to that employment
relationship.
The trial period is voluntary and needs to
be entered into in good faith, and the employer and employee
need to agree to the trial in writing.
Q: Why is the
Government introducing a 90 day trial period?
A: Existing
legislation exposes smaller businesses to the risk of costly
employment action if an employment relationship does not
work out, and discourages them from taking on new staff.
Having a trial period available will enable small and medium
enterprises to determine an employee’s suitability for a
job, without the risk of legal proceedings if the employment
is terminated.
The 90 day trial will also allow people
who are on the margins of the labour market greater
employment opportunities. Such job seekers may include:
youth, first-time workers, those returning to work after a
period of unemployment or childrearing, those with
disabilities and mental illness, migrants and those with
overseas qualifications, and people with convictions.
Employers will be more confident in giving these people a
fair go and the opportunity to prove themselves.
Q: When
will these provisions come into force?
A: It is intended
that the provisions relating to trial periods will come into
force on April 1, 2009.
Q: Why is this Bill being
progressed under urgency?
A: Across the board, the
Government is moving to mitigate the effects of the global
economic troubles and position New Zealand for higher growth
in the long term. The 90 day trial period is an integral
part of that response.
Q: What safety mechanisms are there
to protect workers?
A: The good faith provisions of the
Employment Relations Act 2000 will apply.
Remedies are
available if employers act in a discriminatory manner or in
the case of sexual or racial harassment. Employees will
still be able to take a personal grievance under the
discrimination provisions of the Employment Relations Act
through the Employment Relations Authority or Employment
Court.
Protections regarding pay, conditions, leave, and
health and safety are unaffected by employment in a trial
period.
The Bill also ensures that an employer and an
employee may only agree to a trial period once. So if the
employment relationship ends and the employee is
subsequently re-employed, the option of a trial period will
not be available.
Q: What if the employee leaves because
they have been discriminated against – e.g. the recent
case involving the pregnant workers?
A: Employees will
still be able to take a personal grievance under the
discrimination provisions of the Employment Relations Act
through the Employment Relations Authority or Employment
Court.
Q: What about beneficiaries, will their stand-down
period be affected?
A: Employees on a trial period, if
they were previously on a benefit or if they receive
assistance post-redundancy in a new package to be announced
before Christmas by the Minister of Social Development, will
not face a stand-down if they go back on a benefit or onto
the post-redundancy assistance, unless they have been
dismissed for misconduct, or have chosen to end the trial
themselves without a good reason
Q: What businesses will
be able to employ people on a trial period?
A: It will be
available to businesses with fewer than 20 employees.
Q:
If employees can’t go to the Employment Relations
Authority or the Employment Court and they believe they were
dismissed unfairly who can they turn to?
A: They can
still use the Department of Labour’s Mediation
Services.
Q: What is the effect of the Kiwisaver changes
in the Bill?
A: These changes repeal the amendments
introduced by the previous Government, and are required as a
consequence of changes made to the Kiwisaver
Act.