Probationary Periods and Political Footballs

By Cain, Greg; Cunningham, Amy | New Zealand Management, August 2008 | Go to article overview
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Probationary Periods and Political Footballs


Cain, Greg, Cunningham, Amy, New Zealand Management


Get the feeling it's election year, anyone? The political football that is employment law has been tirelessly booted around Parliament this year, sparking significant media attention.

So far this year, changes that have taken effect include compulsory employer Kiwi-Saver contributions, and flexible working. The Government has also introduced legislation to Parliament providing for compulsory rest breaks, and breastfeeding in the workplace. On top of all that, the Government has announced stronger protections for casual and temporary workers, and public servants are to receive an extra week's annual holidays. And the Government has even established a working group which is looking at compulsory redundancy compensation.

A cynic would say that the Government knows it does not have time to get all these proposals through Parliament, even if it can command the necessary support. It might garner a few extra votes in the process of trying, though.

PROBATIONARY PERIODS National has largely carped around the edges, and has been very cagey about its own policies. However, recently it has grabbed the headlines by promising to bring in a 90-day voluntary probationary period for new employees. This would apply to businesses with less than 20 employees, and would allow employers to dismiss a new employee within 90 days, without the risk of an unjustified dismissal claim. The detail is unclear at this stage: for instance, whether the policy would affect various other personal grievance claims.

CURRENT STATUS OF PROBATIONARY PERIODS Under the current law, employers and employees may agree to an initial probationary or trial period, provided it is recorded in the employment agreement.

However, the employer must still follow a fair disciplinary or dismissal procedure: case law suggests that this is not as extensive as the procedure for a longer serving employee, but a probationary employee must still be warned of their inadequate performance and given a chance to improve. Otherwise, the dismissal risks being unjustified.

COMMENT ON PROBATIONARY PERIODS National's policy has been bluntly criticised by the Labour party and trade unions. Helen Clark has labelled it as "completely daft", and Trevor Mallard said it is "almost a charter for people to abuse newly appointed, low wage workers". Their argument is that strong rights for workers give security and fairness, and are an essential condition for lifting wages and living standards. With New Zealand currently entering a difficult economic environment, many believe we should be strengthening employee rights and job security rather than eroding them with policies such as this.

However, National and employers argue that the proposed policy has many significant benefits for New Zealand.

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