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.
Facebook
Twitter
Scoopit!
So why not have the power to fire invested in the workers?
Anita
As I said earlier in this thread, the company I part own derives significant revenue for employment disputes, the gravy train that is the ERA. I understand this stuff quite well. I think the laws that we currently have are shit and although they provide personal benefits I think they should change. If my companies income is reliant on laws that are easily manipulated and misused then my companies imcome is not sustainable. Luckily it’s only a significant portion of the company revenue not the entire revenue stream. We (the directors) will utilise the opportunity while it exists but will be very happy to turn our mixture of skills to something more productive when it’s not available.
So what did you think of the idea of a salary/wage loading during a probation period – bit left field for a ‘right wing nut job’ eh?
So let’s drop the probationary period to 30 days. That’s about how long it takes to train a McDonald’s worker. And having been in a lot of lines that were crippled by poorly functioning McDonald’s workers, if I were a franchisee I certainly would cherish the ability to give the job to someone who could actually perform it.
burt,
Do you think all the employment related issues SMEs have are related to the ERA? Personally I reckon there are a whole bunch of others to do with people who are not skilled at managing staff taking on risky staff management tasks at the most fragile times for their businesses.
It’s not dissimilar to the contracts-for-service used in many high skilled jobs. I think high skilled jobs would continue to use contracts for service, and for low skilled low cost jobs I can’t see employers being willing to pay 10% extra to new staff, even to contract out.
I also think it creates moral hazard problems and would make it very tempting to use this as a temping process while one tries to find a more perfect employeer (again a contracting model).
cut to the chase… it is nationals policy to confuse and intimidate workers. a confused person is most controllable because as Kafka found out it is impossible to tell what the hell is going on when nobody is accountable or the rules are never made clear.
randal
Are you are talking about our current govt or employment laws?
I think randal dropped his silly sandal again burt.
Right, and good employers have nothing to fear if they lose all their rights under some hypothetical Radical Socialist Greens government. The point is that IR disputes should be low-cost affairs that don’t unfairly favour either party.
Removing people’s rights to challenge their dismissal for a reason that can’t be described as “extraordinary” is exactly the sort of thing that unfairly favours one of the parties involved in the dispute.
Trial periods are well and good, but they should be contracted as such, and should last a short time- say, a couple weeks. Three months is pretty ridiculous- there are many jobs that don’t last that long, let alone need that long to establish competency.
Very simple solution, leave the law how it is. Currently the law allows for a probationary period, what is it with this National party, always trying to fix things with new laws! gosh youd think they were communists or something.
As the law stands if both the employee and the employer agree they can have a probationary period, why does this need changing? if a potential employee doesnt want a probationary period, they can go somewhere else, and the employer can hire some one else.
I coudl understand it being made compulsary if it was in wide spread use currently but its not.
I do ask for one consession on the proposal though, that employees under nationals proposed 90 day probationary period who are fired at the end of the 90 days are allowed to go to court for unpaid wages, as I understand under the current policy they are not.
randal,
Weed can be fun. I like smoking it then talking shit while eating french vanilla ice cream and dark chocolate. But seriously, you need to smoke a lot less. Or at least, stay off the blogs once you have indulged.
Remember what we’re talking about here – removing rights of hundreds of thousands of New Zealanders, allowing bad employers to use the threat of the sack to stand over vulnerable workers, and why? because of some anacedotal evidence of a few marginal cases of employers having trouble getting rid of bad employees.
Two basics of policy
- you don’t make policy for the exceptional case or the anacedote, you make it to work well for most people most of the time and based on real evdince. If there are marginal problems, you make policy targeted specifically at those problems.
- you don’t make policy that primarily advantages the bad actors.
What about the workers? What do they want? This is just catering to a minority group.
killinginthenameof,
The current probationary period is utterly meaningless. At the end of the “probationary period” the employer must still have a good substantive reason to terminate the employment and must still follow the same procedure he or she would have had to follow after the probationary period. Whether the employment is being terminated within or outside the probationary period makes no difference.
Anita
I agree with you here, the ERA has produced a larger volume of work for employment lawyers than the ECA did but it’s not the cause of the problem. The issues could easily be much like you say but building an industry around managing the interaction of the unions and the employers is IMHO bureaucracy for bureaucracy sake.
If the unions want to increase their membership then they need to add more value for their members. Not be supported by additional assistance/programs to help them achieve what they say they are good at. Personally I’m not a union guy, I was a youth rate compulsory union member when I first started work and these great things called ‘unions’ I had been told about were hopeless when I had my first employment dispute. I reckon when it was normal for 400 men to go down a mine and only 395 would came out – unions were excellent at making sure that changed. I don’t see how they can expect to have employment laws changed to accommodate their inability to provide value to their customers.
Employment laws need to be fair and reasonable and address to some degree the power balance between the employer and the employee. However they still need to recognise the golden rule. He (or She) who has the gold makes the rules. It can’t be the only rule, but we cannot forget it exists.
Saying that ‘good employees’ have nothing to fear from having to work without rights is premised on the idea that all employers are always fair in their dealings with all workers.
Hell, why do we need Police to have a search warrent to search your house? Only bad people need to fear getting searched, because the Police are always fair and always that their facts right.
Why do we need any rights at all? Rights only protect bad people because those actors that are restrained by rights are always behave correctly, have their facts right, and always behave fairly.
One other thing. The employers here talk like they pay workers good money…such good money they can demand the best out of their workers or goodbye, meanwhile the debate rages about the wage gap between us and Australia.
Two basics of policy
- you don’t make policy for the exceptional case or the anacedote [sic], you make it to work well for most people most of the time and based on real evdince. If there are marginal problems, you make policy targeted specifically at those problems.
- you don’t make policy that primarily advantages the bad actors.
My point exactly.
I guess Steve thinks good employers are the “exceptional case”. Or is he suggesting that “most” employers would abuse the 90 day trial “most” of the time. If some marginal employers abused the 90 day trial policy, why could we not “make policy targeted specifically at those problems”?
And, once again, this policy would advantage the 98.9% of good employers and the employees who would not otherwise have been given a chance.
Steve Pierson
I think you are getting confused. Where you say
The sort of thing that seems to be being suggested is that Police should be given a search warrant for every house and every person because they need it for a few.
Of course police need that power, but only after some bad behaviour has been brought to their attention. We don’t all walk around with an arrest warrant pinned to our backs just incase one of us stuff up and breaks the law.
National is meant to be releasing its industrial and labour policy this week or next – the 90 Day No Work Rights policy will be the centrepiece of it… what are the odds, do you reckon, that the interests of workers will be ignored in every aspect of the policies (apart from a cursory mention) and everything will be to weaken the position of workers and give more power to employers (that power balance is central to whether workers get decent wages or not)?
Billy. Don’t be silly and don’t purposely misinterpret me. I’m saying National’s policy will only help out the few bad employers. The current situation works just fine, the vast majority or employees have no trouble and the few disputes there are are resolved cheap and quickly.. if it’s not always perfect every time that’s no reason to throw the baby out with the bathwater.
I’m saying National’s policy will only help out the few bad employers.
And I’m saying the proposed law will help good employers and employees who are presently less likely to have a risk taken on them. At what I consider to be the unlikely risk of bad employers arbitrarily sacking employees who can do the job in the expectation that they’ll be able to find another.
burt. you’ve confused the notion of rights in my examples.
Workers have the right to a fair process and justified reason for dismissal
People have the right to not have their property searched by the Police without warrant.
We don’t take away the right to be free from unreasonable search by arguing that only bad people will get searched. So, why would we take away the rights of workers to fair process by arguing that only bad employees have anything to fear?
And why does everyone delight in using “Billy” and “silly” together all the time? It’s not even my real name.
Steve Pierson
Are you willing to address the question of why this needs to be a one size fits all scenario.
Why can’t employers acting in good faith employing skilled people deploy a probation period. Why should a business owner/manager not be able to consult existing staff and see how they feel about the suitability of the ‘new guy’ they now need to work with?
One of the most difficult situations I have had to deal with in a team leadership role was an existing excellent employee telling me she would leave if we didn’t get rid of the new guy who was rude and incompetent. I was powerless, senior management were powerless and a great team member resigned. Loose/loose
burt,
I wasn’t suggesting building an industry around managing the interaction of unions and employers. In fact I wasn’t suggesting building an industry (use existing providers and schemes) or managing the interactions of unions and employers at all.
I was suggesting that the government should invest in providing both support services and training to SMEs so that they can do the best possible job of managing their staff.
Help SMEs be effective employers, make the staff as productive as they can be, make New Zealand’s economy boom. What could be better?
burt. I’m just dealing with the policy that National has proposed, which is a one size fits all. All workers trying to get jobs in small businesses will have to accept a 90 day period where they could be fired for no good reason.
If there was some sophisicated approach that wouldn’t disadvantage most workers and give unwarranted power to bad employers, that would be different, but that’s not what National’s policy does.
Steve Pierson
I think it’s still you who is confused although I agree my point was not clearly made.
Not allowing a probation period fullstop is like saying all people will need to be arrested one day so print an arrest warrant and attach it to them now. It will be handy when we need it later.
Allowing a probation period is not comparable to not needing a search warrant, it’s comparable to presumption of innocence.
Billy.
“And I’m saying the proposed law will help good employers and employees who are presently less likely to have a risk taken on them”
any actual evidence (not stories – stats or studies) that the current law discourages employment? Doesn’t seem to be doing us any harm.
burt,
They can now, as you know.
They can now, as you know.
Anita
I like the idea, I don’t see it as a govt function. However be it govt or private it will have significant benefits so therefore the ownership of the scheme is inconsequential to it’s value as a concept.
Why do you think it needs to be govt?
burt,
Because the problem exists now and the private sector doesn’t seem to be dealing with it.
I think one of the roles of government is to see the gaps where things are needed and make sure the gaps are filled. You will note I was suggesting that government use/encourage existing (largely private) providers to fill the gap, not that central government do it.
Ideally the private sector would take over and the government would quietly back out.
burt. the current law is not akin to arresting everyone and taking their fingerprints. The hypothetical you describe is not a right, it’s a restriction on freedom of individuals, forcing them to be fingerprinted.
What rights do is protect the weaker party from unreasonable use of power against them (in fact, the whole of the law can be seen as a restriction of the unreasonable use of power by the powerful to empower the rest of us) – the public is protected from unreasonable exercise of power by the Policy, the employeee is protected from unreasonable exercise of power by the employer. When you take away rights, you are opening the door for unreasonable use of power by those in powerful positions against those with less power – you should only do that with good reason.
Anita
No I don’t know, how is this achieved without a messy process when there is no probation period?
burt,
Involve existing staff heavily in the recruitment process. Make sure the recruitment process is effective at checking how the potential employee would interact with existing staff. Do recruitment properly!
(This is part of my point about why SMEs need support with employment processes, these things are entirely possible you just have to have the knowledge and the confidence)
Which reminds me, I’ve exited a staff member for incompetence – it’s entirely possible under the current law. I think it sucks that your organisation couldn’t work out how – again good training and support gets you a long way!!
Anita,
They can now, as you know.
This is just plain wrong. You can employ someone and say they are employed on a probationary period. But there is no difference to the procedure or practice when terminating an employee’s employment during or after a probationary period under the current law. If you have a 60 day probationary period, whether the employment is terminated on day 58 or day 62 makes no difference. A probationary period is utterly meaningless under the present law.
Steve, sorry, I haven’t had time to conduct any surveys into this. In fairness, I’ve been too busy managing my staff. I know quite a few employers. We talk. No one is desperate for a 90 day trial period so they have an opportunity to screw their staff. Sometimes, however, they say they’ve decided not to employ someone because they are worried they are not the right person. Maybe they were wrong. Guess we’ll never know.