The 90-day rule: A small benefit to employers or unemployed

New Zealand Treasury-commissioned research found that the 90-day trial period has had little effect on business’ hiring behaviour. The CEO of Small Business Voice, Max Whitehead, says the law is “fundamentally flawed.”

“There are so many legal fish hooks with the application of the trail period that employers are becoming too fearful to use it,” says Mr Whitehead.

Mr Whitehead adds that the law denies employees the right to know what they did to deserve dismissal. More importantly, he says, they don’t get a chance to defend themselves.

Here is a summary of the benefits Motu Research found regarding the trial period:

There has been little impact on the willingness of employers to take on new staff.

There is no evidence to show that it has helped disadvantaged job seekers to find work.

There has been no significant increase in short-term employment.

The slim benefit that the 90-day rule has had for employers is that it has decreased the costs associated with dismissals. And from an employee’s perspective, it has provided job security for the first three months of their employment.
The Prime Minister, John Key, disputes the findings. He says they don’t align with what hears from business people around the country. © Grand Creative Limited. Page 2 of 2

Mr Whitehead: “As 97% of all New Zealand enterprises employ less than 20 people, it is a shame that Members of Parliament listen only to big business lobbyists and their associated unions and not small business owners or their employees.”

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