Editorial: Govt missed chance on 90-day trials

Employment law changes are constantly cited by business lobbies as a likely reason for declining business confidence. Photo / 123RF

The measure of a Government is often not what it does but what it leaves alone. And very often, what it decides to leave alone is something it has vehemently opposed when enacted by its rival. The 90-day trials put into employment law by the previous Government was one of those things.

Labour in Opposition fought the 90-day trial legislation to the bitter end and the trade union movement campaigned against it. But the provision for employers to be immune to claims of wrongful dismissal from a newly hired person for their first 90 days of employment made good sense.

It encouraged employers to take on people they might have considered too big a risk otherwise.

Employment is a heavy responsibility carrying high costs and borderline candidates will not be hired unless they can be easily fired if they prove unsuitable. The legislation was good for employers and for job-seekers who would not otherwise have been given a chance.

Once the fuss had died down, Labour would probably have come to terms with 90-day trials before last year's election if they had thought they were coming to power. But until Jacinda Ardern took over the leadership just seven weeks before the vote, Labour looked to have little chance. So it came to office still committed to abolishing 90-day trials and it is only thanks to New Zealand First that the trials survive at all.

They are available now only to small employers of no more than 20 people. The Employers and Manufacturers Association argued for a less restrictive rule when the Employment Relations Amendment Bill was before a select committee, but has been unsuccessful.The bill was reported back to the House last week with no significant changes to the 90-day trials provision or other issues of most concern to employers, such as giving unions uninvited access to workplaces.

Employment law changes are constantly cited by business lobbies as a likely reason for declining business confidence. The Prime Minister made a strenuous effort to address the decline in a speech to Auckland business three weeks ago. She tried to put to rest impressions the Government wanted to return to the industrial relations landscape of the 1970s. Industry-wide "fair pay" agreements, for example, would be rare.

Employers need to be reasonable too. This is a Labour-led Government and it naturally wants to strengthen the hand of unions in bargaining and their ability to protect workers in a vulnerable position. Rights to enter workplaces uninvited have to be accepted, no matter how much employers resent the intrusion.

But the 90-day trials should have been left as they were. An EMA survey of its members suggested 90 per cent of workers given a trial were kept on. For that reason a concession in the select committee would not have made much difference on the ground. But it would have been an encouraging signal to business that this Government is reasonable and pragmatic. A confidence-building opportunity has been missed.