New Zealand reinstates 90-day trials for bigger employers

The National-ACT coalition is expanding the controversial 90-day trials to all businesses in its latest move to overhaul employment legislation.

The Employment Relations (Trial Periods) Amendment Bill passed Parliament on Thursday, expanding the availability of 90-day trials to bigger businesses.

Prior to its passing, the trials were only available to employers with 19 or fewer employees.

Workplace Relations and Safety Minister Brooke van Velden said the passing of the amendment will give businesses the "confidence to innovate and grow."

"It only takes one employee with a poor attitude or who simply does not have the skills to perform their duties to take down an otherwise productive team. 90-day trials give employers much-needed certainty to make decisions and get ahead," Van Velden said in a statement.

In New Zealand, businesses with over 20 workers employ around 72% of the country's employees.

"We've heard loud and clear from these businesses; they want 90-day trials back," Van Velden said.

Benefits for employees

Employees will also benefit when employers have the confidence to take on a new employee without the risk of a costly dismissal process, according to the minister.

"Workers who are just starting out, those who have taken a break from working or people looking to change careers will benefit from this bill. Workers who might be considered risky, with little work experience or a criminal background, will benefit from this bill," the minister said.

She also clarified that extending the availability of the 90-day trials won't mean all new employees will have trial conditions.

"Rather, it provides the option to include trial periods in employment agreements in the future," she said.

The expansion of the 90-day trial periods will take effect the day after the legislation receives Royal assent, according to Van Velden.

Employers welcome reinstatement

Employers previously advocated for the return of 90-day trials after the previous administration restricted it to employers with fewer than 20 employees.

Retail NZ commented that its return will remove some recruitment barriers and allow retailers to be more agile in responding to the needs of fast-moving businesses.

"These government decisions are a real boost for the retail sector which has been under incredible pressure in the past few years," said Retail NZ chief executive Carolyn Young in a statement.

Unions, however, said the move only grants employers the right to fire at will.

"The right to fire at will and without reason was limited to businesses employing fewer than 20 workers, but now all new workers will be vulnerable to exploitation," said Council of Trade Unions president Richard Wagstaff in a statement.

The expansion of the 90-day trial periods is part of the new government's recent overhaul of employment laws. Recently, it repealed the Fair Pay Agreements.