Government to keep 90-trial for SMEs

by Kelly Gregor26 Jan 2018
The government announced proposed changes to the Employment Relations Act (2000) yesterday, which it claims will create a high-performing economy that delivers good jobs, decent working conditions and fair wages.

The government said the bill is designed to provide greater protections to workers, especially vulnerable workers, and strengthen the role of collective bargaining in the workplace to ensure fair wages and conditions.

Workplace Relations and Safety Minister Iain Lees-Galloway said making life better for working New Zealanders is a fundamental value for the Labour-led government.

“Too many working New Zealanders are missing out on the benefits of economic growth under the current employment relations system.

“Good employment law strikes a balance between employers and workers. Under the previous government the balance tipped away from fair working conditions for workers. We will restore that balance.

“The legislation is expected to have its first reading in early February and I encourage everyone interested in this important legislation to have their say at the select committee process,” says Mr Lees-Galloway.

However, National said in a statement that the proposed employment changes would reduce job opportunities for Kiwis.

National Party workplace relations spokesperson Amy Adams said the government’s law changes would only slow down the job market. “The law as it stands encourages all businesses, small and large, to grow their workforces and take a chance on new workers and long-term unemployed people.

“While Labour (the government) have now partially backed down and allowed small business to continue with 90-day trials, they’ve still closed those trial off to the bigger businesses that take on many of these vulnerable worked. Those workers will have fewer opportunities”

“If 90-day trials are okay for small business, then why shouldn’t they apply to larger businesses as well”,” Adams asked.

“Under current employment law New Zealand has added a mammoth 245,000 jobs in the last two years, and has the third highest employment rate in the developed world. Nearly 80% of New Zealand workers are in full-time jobs, and wages have been growing at twice the rate of inflation,” Adams added.

Video recruitment platform PreviewMe’s chief executive Johnny Farquhar told NZ Adviser that it’s easy to see why small businesses need some mechanism to deal with the ‘wrong hire’ quickly, but removing the 90-day trial periods for big business makes “a blanket assumption that they are somehow less affected and more capable of absorbing the cost of dealing with an employee that for one reason or another is not working out.”

“Big or small, the best insurance policy companies can have is doing everything in its power to progress the right applicants through to an interview in the first place. The technology is there to give employers better information to support better recruitment decision making.

“Whether under a 90-day trial or probationary period, wouldn’t every work place be better off if it didn’t have to go through the pains of dismissing new employees because the right decisions were made earlier?” Farquhar added.

PreviewMe launched last year and uses AI to match the right candidates to the right roles based on skill set and experience. PreviewMe’s key differentiator is facilitating a shift away from paper resumes by using video content to promote employers and candidates alike.

What are the government’s key proposed changes?
  • Lift wages through collective bargaining
  • Reinstate key minimum standards and protections to employees such as the right to a prescribed meal and rest breaks
  • Limit the use of the 90-trial periods to businesses with fewer than 20 employees
  • Lifting the minimum wage to $20 by April 1, 2020
  • Creation of a framework for Fair Pay Agreements

Related stories:
Employees still uncomfortable with basic HR issues
Start-up challenges recruitment industry

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