Written By: - Date published: 4:14 pm, July 15th, 2008 - 135 comments
Categories: national, workers' rights -
Tags: 90 day policy
Why does National want to remove the right of workers to appeal against unjustifiable dismissal in the first 90 days of employment?
The reason National gives us is that workers having the right to sue for unjustified dismissal has a chilling effect on small businesses. Supposedly, they are afraid to hire workers because if they find they want to get rid of the worker they will have to go through a proper process and have a justifiable reason for dismissal. Employers avoid this risk by not hiring people. And that, we’re told, leads to less employment than would otherwise be the case.
First, employment is at record levels and the cry from employers is always ‘we want more workers’ not ‘I’m scared to hire people’. There is no evidence that the right to fair process and justified dismissal dissuades employers from hiring. The policy would not increase employment.
Secondly, a study shows there are 1.5 employment related problems per 100 workers a year in the private sector (2.9 for small businesses). The median cost was $5000 ($3,900 for small businesses). Of these ERPs, most were handled quickly and cheaply by agreements between the employer and the employee; only 5% went on to become personal grievance cases. Only 10% of disputes involved employees who had been employed for less than 3 months.
Personal disputes are rare, in most cases the employee is found to have a good claim and gets a settlement, the payouts are small, and very few involve employees employed for less than 3 months. Workers’ rights are not overly burdensome on employers and when they are used employers are usually in the wrong. Removing these rights would only give free rein to the few bad employers to threaten any workers who don’t ‘behave’ (eg work unpaid overtime, work in unsafe conditions, not join the union) with instant dismissal. Do we really want to reform the law to advantage bad employers?
National might believe its policy is good for employment and reduces a heavy burden on employers but it doesn’t. All it does is give power to coerce workers with the threat of dismissal, which some bad employers will exploit. The law ain’t broke, and that’s no reason to fix it.
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Anita
Yes yes, great… everybody, stop what you are doing and come and have a chat with Jo Blogs, Jo wants to work here and we need an extra staff member because we are busy. Can you all stop what you are doing and socialise with Jo for a while. Sign-off sheets are over here once you have made an assessment.
Yep – that will work in all cases (one size fits all) – NOT!
Billy,
So what do you want from your probationary period if the one you’ve got now isn’t good enough?
must … go … to … bed!
That rule was outlawed 800 years ago.
Draco TB
I like this bit….
“It required the King to renounce certain rights, respect certain legal procedures and accept that his will could be bound by the law.”
Makes me think of Darnton Vs Clark.
But seriously, do you think that the Magna Carta removes the inherent right of a person spending their own (or their companies) money to decide who should work for them and that it denies them some form of ‘testing period’ when they are spending that money?
burt,
“Hi, this is Jo, as you know we’re looking for a new and Jo’s our final candidate at this stage. Jenny, Shane and I think Jo’s great, but we’re not quite sure yet, and Jo’s pretty keen to work here, but she’s not sure yet either.
She’s come in for the afternoon so she can get a feel for the job, and you all can get a feel for her. She’ll be spending a while with Bill talking about the job and having a look at the workspace and running through some of the spreadsheets and the tasks she’ll need to do. Then I want her to spend maybe 15 minutes with each of you, have a chat about what you do, what you think her job will be like, and ask her anything you’d like to check out.
Could whichever of you she’s with at afternoon tea time make sure she gets a cuppa and show her the break area.
Afterwards I’ll catch up with each of you about how it went, then Jo and I will meet tomorrow lunchtime for coffee and see how we want to proceed from here.”
It’d take 20 mins from each staff member and would be a robust, fair, effective process that would be far less work than hiring her then dismissing her.
Sure it’s not going to work in a big call centre, but the problem we’re supposed to be trying to solve is an SME hiring a new employee and being concerned about making sure they perfect.
Anita
I have interviewed like that, I have been interviewed like that.
Yes it sorts out a lot of things. But what about the guy who after he has been there a week still hasn’t had a shower since the day of the interview three weeks ago? There is still no way to get past the ‘first impression” in 20 minutes. This is the issue, if it were as simple as this in all cases it would be the norm. It might be commonplace in higher paid roles but as you say it won’t work for the call centers etc, which if I’m not mistaken is where workers rights are a bigger issue.
One size will not fit all, why must we try and work around a law that tries to make that so?
“One size fits all”… that IS kind of how most laws work.
The moment you start to make up exceptions, or complex gradations of application is the same moment the sharp men in sharp suits start working the angles.
At the heart of The standard’s arguement is an absurdity…
- That an employer would fire a good employee after 89 days (and 89 days of training investment), so they don’t need to give them rights, and then roll the dice in the hope that they get someone as good.
No recruiters would work with such employers. Recruiters only get paid when the employees stay for 6 months.
An employee can leave at any time (ever tried to make someone, who didn’t want to, work out their two weeks notice?), but employers are currently locked in to employees to a large extent.
Most developed countries have this law and the sky hasn’t fallen in those countries.
This is just patch protection from the EPMU and their bloggers.
[lprent: I wearily point out yet again. You are attributing an opinion to a lump of software running on some hardware. Now I realise this may come as a shock to you, but software doesn't think.
Direct your criticism to the writer of the post, and I'd suggest that you read the About and Policy sections at the top of the site. It appears you are ignorant about how this site runs.]
Has anybody else commenting on this thread acutally worked somewhere overseas with a probationary period written into employment law??
burt,
Then you talk to him, and if that doesn’t work you run a nice short tight process and fire him if he doesn’t sort himself out. I’ve had personal hygiene conversations with staff I’ve managed; they’ve all sorted themselves out without a lot of effort on my part, they would have been gone if they hadn’t.
National’s proposal does nothing to address the issues of call centres it is explicitly about small employers. My suggested approach would work fine for them, and it would give far better outcomes than try-and-fire alone would.
lprent,
Now, as a professional coder, you know that’s just not true. Late at night code is a devious and vicious opponent!
The legislation, when passed in 2009, will allow more opportunity to employers and employees alike.
Labour’s attack on employers, under the current system, make them afraid to hire new staff.
A speculation that flies in the face of the measurable FACT that under the current Labour laws New Zealand employers have employed so many of us that our unemployment rate is at a record low.
You employ a person because you hope to benefit from their efforts. This obliges the employer to meet a number of socially and professionally accepted minimum standards and codes of behaviour; exactly as is required in every other aspect of their business.
Why should the vast majority of decent New Zealanders who do an honest day’s work be placed at such an enormous power disadvantage during the first three months of working for a new employer? In my experience the first six months of ANY new role has been a learning curve; a period of heightened vulnerability while I learn not only the job, but unravel all the unwritten, unspoken politics about the place. The last thing most of us need during that initial period is the feeling that our manager could unilaterally sack us on a whim.
While this proposal might protect a minority of employers from a minority of bad employees; for the rest of us it’s bad news. (And so much for ‘one size fits all’.)
“One size fits all’ that IS kind of how most laws work.
The moment you start to make up exceptions, or complex gradations of application is the same moment the sharp men in sharp suits start working the angles.”
For once, I actually agree with RedLogix. But s/he needs to remember that not all of us in sharp suits are ‘working an angle’. I just wear the suit ‘cos I make it look good.
The Magna Carta is the base of most of our laws and it doesn’t prevent people from hiring or firing. What it does is ensure that those doing the hiring and firing do so under some rules that help ensure consistency.
Question:
Why not regard the notion of a probationary period as part of the recruitment process?
Lets be honest. There are those out there who interview terribly. the idea that you can accurately predict who is going to be a good candidate for a given role is great if you have a large, well resourced HR department at your disposal.
Most small businesses do not. The idea that you can take a chance on an employee and that if it doesn’t work out, then no harm, no foul would be of great benefit to many small businesses looking to grow their business.
I am sure that such a trial would not, nor should not, remove the obligation of an employer to ensure that any employee, even probationary, is given every reasonable assitance to perform to the required level.
In all of this I am still reminded of my own employer, who is the most fair minded employer that I have ever worked for, having to take time out of his business, costing him money to engage legal representation, to defend himself in a PG case after he had dismissed a recently hired part time worker who had verbally abused a customer with various four letter words.
Either through settlements or legal fees, employers get nailed. Larger employers can absorb these costs. $3900 to settle a PG case for a small business could be the difference in a loss or profit situation.
Billy:
“I was addressing ‘nome’s apparent suggestion that the ECA allowed an employer to not pay his or her employees and there be no sanction. Patent nonsense.”
It did. Some facts that you don’t appear to know.
1) Under the ECA parties could wait a year or more for mediation and two years for an adjudicated hearing. As a result, many people would just move on, not wanting to be bothered with having that worry hanging over their head for years.
In contrast, under the ERA the process is quick and easy with the average time spent waiting for a hearing being just 3 weeks.
2) Under the ECA a typical one day hearing would commonly involve legal costs of $5,000 for each party. So unless your claim(s) involved more than $5,000 in wages in arears it wasn’t economically rational for an employee to seek legal redress.
The result was that employers could get away without paying employees for weeks, and not face any consequences.
In contrast, under the ERA mediation is free. So that one’s a no brainer.
A probationary period would take us back to the days of the ERA, as National has stated that the ERA’s employment institutions won’t apply, and employees will have to seek legal redress for grievances through the civil courts. That means lawyers and a lot of money for low-paid workers, who are the ones who are most commonly screwed over.
If you don’t believe me, go read the following academic article:
McAndrew, I., Morton, J. and Geare. A. (2004) The Employment Institutions, in: Employment Relationships: New Zealand’s Employment Relations Act, Rasmussen, E. (ed) Auckland University Press, Auckland.
SR:
“Why not regard the notion of a probationary period as part of the recruitment process?”
Because it could mean being totally screwed over – i.e. not getting the money that you worked for because you employer decides they don’t want to give it to you.
“$3900 to settle a PG case for a small business could be the difference in a loss or profit situation.”
But as Steve points out in his post, that’s a very rare situation that law abiding employers don’t have to worry about.
“Most developed countries have this law and the sky hasn’t fallen in those countries.
This is just patch protection from the EPMU and their bloggers.”
[lprent: I wearily point out yet again. You are attributing an opinion to a lump of software running on some hardware. Now I realise this may come as a shock to you, but software doesn't think.
Direct your criticism to the writer of the post, and I'd suggest that you read the About and Policy sections at the top of the site. It appears you are ignorant about how this site runs.]
Sorry for the lazy typing.
In my defence, my guesss would that be that every contributer on the standard would buy into the business owners/baby eaters are mainly into this this legislation so they can strip worker of their rights and churn them every 89 days argument.
My points still stand, and I will direct them at Steve in the first instance…
1. It is uneconomic to continually churn employees every 3 months. Advertising, Interviewing and Training all cost time and money. I don’t know one employer who likes the interview and recruitment process.
2. If you churn employees for no good reason you are just as likley to end up with worse employees every time you churn. Your existing employees are going to get very tired of this very quickly, continually “helping the new guy”.
3. Recruiters are not going to work with you if you churn employees every 89 days.
4. The sky hasn’t fallen in, in countries where this has been tried. This is a little like a paid internship. My guess is that Steve would reel in horror at the idea of the overseas unpaid intership and proclaim it to be nothing more than slave labour.
5. Employees can walk away from a job whenever they feel like it (I was just talking to a friend who did that very thing), while employers have far less freedom.
6. There are large benefits to the long term unemployed and new job starters in this law. They get a chance to prove themselves in the workplace and the employer can take a calculated risk on them.
J mex. in reverse order.
6. There’s no evidence that people are being barred from the workforce solely by lack of a probationary period in which they can be fired for no reason (probationary periods with protection against unjustified dismissal are already legal). Incidentally, less than 0.3% of the workforce has been on the unemployment benefit for over a year.
5. Employers innately have the power in the employer/employee relationship – they own the means of production, they are the gatekeepers to employment, workers need to work to make a livable income. Workers rights law only goes some way to balancing the odds.
4. I’m not a fan of unpaid internships either – they prevent anyone who dons’t have another means of support from getting their foot in the door to many professions. In other countries the probatioanry period is not a no rights period, you still ahve protection against unjustified dismissal.
1, 2, & 3. I’m not saying that a significant number of workers will be churned every 89 days. Rather, this law gives licence to a few bad employers to exert great power over new employees (you can be fired for joining a union, refusing to do unpaid overtime, refusing unsafe work etc) and will be exploited by the same kind of people currently exploiting triangular employment relationships to avoid the costs of workers’ rights like sick pay.
Hsving actuall worked in a country with a probationary period I can assure you that 99% of the negative comments about National’s policy are irrelevant. NZ unions are going to lose a lot of credibility when this becomes law and their dire predictions are shown to be nonsense.
Oliver. In the country you worked in, could a probationary worker be fired for refusing to work in dangerous conditions? Because that’s what the Nats are proposing.
J Mex: I post here on the odd occasion. I have no idea how I’d feel about trial periods, I can see good and bad points. However I have run across a few crap managers in my time. I had a look at even more case studies when I did my MBA. If you give some crappy managers a position without some redress then they will abuse it. They will do it on the most vunerable, the young elderly, and the people who have a stand-down period.
I’d be very loath to have this available if there wasn’t any type of comeback on unprofessional idiots that abuse it. For preference make it a criminal act akin to fraud with a mandatory prison sentence if convicted. Some safeguard like that would probably satisfy me.
Because you are so sure it wouldn’t be a problem, then there would be no real hassle adding abuse of this provision to the crimes act?
Steve,
Bollocks, safety laws will still apply. As I said earlier you’ll look pretty silly in a year or so, just ask people with actual experience of probationary laws.
Oliver,
Safety laws may well apply; but the useful application of them still requires that both employer and employee act in good faith to make them work.
The kind of employer that worries me will pressure people to take shortcuts and take risks when they think no-one will notice. 99.99% of the time they get away with it.
It’s only when Mum or Dad doesn’t come home one night that the penny drops. But then it’s too late isn’t it?
Redlogix,
I’ve been around a few workplace accidents in my time. None of them have come from fundamental safety issues, they’ve all come from worker stupidity or laziness.
Protections will still apply, if a worker is pressured to take shortcuts they can just contact OSH.
Oliver, re: safety laws. This is the Australian experience.
http://www.youtube.com/watch?v=w9IMYbt5UuE
Oliver,
None of them have come from fundamental safety issues, they’ve all come from worker stupidity or laziness.
If worker ‘laziness and stupidity’ is the SOLE cause of industrial accidents; then why has the workplace death rate dropped over 60% in the last few decades since the introduction of comprehensive H&S systems? If your claim were true, then all those new safety measures and systems put in place by employers in that time would have made very little difference.
Or are you claiming that workers have gotten less lazy and stupid in that time? And if this is true would you be happy for them to be paid more as a result?
Protections will still apply, if a worker is pressured to take shortcuts they can just contact OSH.
And a week later… bye bye job.
RedLogix
For a few examples of where you are wrong about ‘how most laws work’ think about tax laws, Shop trading hours (I can buy petrol but not plants or alcohol on Easter Sunday!), speed limits, parking fines, postal rates, freight charges, RUC, assault laws, private property laws, drug laws.
I agree everybody should be treated equally under the law (I’m an idealist I know) but I don’t agree the law should homogenise the things it controls into as few rules as possible or just one.
Badly drafted laws or laws drafted to distort ideologically unpleasant natural orders (eg progressive tax laws) is what invites the sharp men in sharp suits to work the angles. Simple identification of different circumstances under the law IS the law reflecting the real world, which is the way it should be. No good will come from attempting to change the real world because political parties haven’t got the balls to back down on a belligerent ideological stance taken years ago to defeat the oppositions policy.
Redlogix,
I didn’t say that laziness and stupidity are the sole cause of all workplace accidents, only the one’s I’ve witnessed.