‘Firms are very clearly saying 90-day trials have given them the opportunity to take a chance on workers they wouldn’t otherwise’
The Employment Relations Amendment Act will restrict 90-day trial periods to employers with fewer than 20 staff from 6 May.
However, according to the ACT’s Small Business and Employment spokesman Stephen Berry, firms are “very clearly saying” that 90-day trials have given them the opportunity to take a chance on workers they wouldn’t otherwise.
Berry’s comments are based on a new nationwide survey conducted by the Employers and Manufacturers Association which found:
• 77% of firms say the 90-day trial period is an extremely important part of hiring decisions
• 90% said they kept employees on after a trial period, with 94% of workers remaining for more than 18 months
• 38% said they had not let any employees go and 37% had let between one and two employees go
• 39% of respondents who had between 19 and 50 staff said removing 90-day trial periods would negatively impact the way they hire staff.
Berry added that young or low-skilled workers, or people who have been out work, have the most to gain from being employed on a trial basis.
“If an employer discovers they’ve taken on a worker who can’t perform or isn’t a good fit, it’s a cumbersome process to manage their performance, and can be financially catastrophic if they get it wrong,” said Berry.
“The survey shows claims that firms would exploit new workers by terminating the employment relationship at 89 days are false. Motu’s research on 90-day trials also found no evidence of firms exploiting the law.
“Recruitment is an expensive and risky exercise. The idea that firms would hire and train new staff only to then fire them is fanciful.”
Berry added that removing the ability of firms to use 90-day trial periods will increase the risk associated with hiring and will hurt the very people Labour claims to care about.
“A truly compassionate government would make it easier for vulnerable New Zealanders to find work and live independent and productive lives.”
The survey by the Employers and Manufacturers Association was completed by almost 1000 firms.
