The '90 day trial period is a flop' - Union

The Council of Trade Unions says the latest report evaluating the effects of Government changes to employment law clearly show the changes "are failing New Zealanders."

NZCTU President Helen Kelly. Source: 1 NEWS

CTU President, Helen Kelly, says the Ministry of Business, Innovation and Employment report, released on Tuesday, shows changes to the Employment Relations Act and the Holidays Act "have failed to increase employment and failed to help disadvantaged workers."

MBIE's latest assessment of the changes says some of the intended aims are working in the short term.

However, both the CTU and the Labour Party's spokesman on Labour, Andrew Little, point to findings in MBIE's report, which show 27% of employers have dismissed at least one employee during or at the end of the 90 day trial period, which was introduced in the law changes in 2011.

CTU President Helen Kelly says that result shows the "infamous 90 day trial period is a flop", and she says there is "no evidence that 90 day trial periods have led to the creation of a single job."

Mr Little says, "Surprisingly the Ministry official releasing the report suggested the trial periods resulted in more employment opportunities, yet the report itself stated there was no evidence the law had an impact on net employment."

"We don't need the 90-day law and under Labour it will go."

Mr Little also says the number of employers dismissing staff during or at the end of a 90 day trial shows "many employers using the law as a standard employment term rather than to genuinely try out a new staff member."

MBIE's evaluation states that employers who had dismissed staff indicated they "followed correct procedures" and said they were comfortable that "there would be no comebacks."

The survey results also show that 72% of employers who had used trial periods had not dismissed an employee on a trial period.

MBIE says interviews with employers revealed that the main reason for using such trials was to help manage risk when trialling new staff.

On changes to the Holidays Act, MBIE's survey results say changes to the Act have increased flexibility and increased choices for some employers and employees, "although choices for some were hindered by a lack of awareness of understanding of some of the amendments or of the previous legislative requirements."

The Ministry's report concedes that on-going advice and education for both employers and employees "will improve awareness around the amendments, which some are still getting to grips with."

Ms Kelly says that it appears some employers may be forcing their workers to cash up annual leave or allowing them to cash up more than a week, which would be in breach of the Holiday Act's new provisions.

She says cashing up of annual leave is being used "primarily by workers on low incomes to supplement their inadequate home pay in lieu of a pay increase".

Both the CTU and Labour's Mr Little also take issue with MBIE's survey conclusions on union access and collective bargaining negotiations.

The Ministry's survey found changes had "little impact among employers and unions and did not increase the number of problems reported."

Mr Little says: "It was predictable that employers would say the reduction in union access rights made no difference to them. However, seven unions said it made it harder to contact members and communicate during bargaining, which means good faith rights were almost certainly affected."

Ms Kelly says no unions thought that the changes had a positive effect and 17% thought that the changes had negatively impacted on workplace relations.