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90 Day no rights makes no sense

Written By: - Date published: 10:21 am, July 31st, 2008 - 18 comments
Categories: workers' rights - Tags:

The National party may prefer not to have their policy examined in great detail, but in today’s Herald Nigel Haworth, professor of human resource development at Auckland University’s Business School, provides some interesting observations about their 90 no-rights plans. Nigel Haworth suggests that:

“National’s intention to introduce, if elected, a 90-day probationary employment period, possibly in the small business sector, should concern everyone who supports the building of a high-value, high-productivity economy…

What are the arguments for the 90-day probationary period? Do businesses, especially small businesses, suffer from unnecessary costs which would be eased by this proposal?

The answer seems to be no. International measures, such as the World Bank’s “Ease of Doing Business” index, suggest that New Zealand is one of the easiest countries in the world in which to do business. The employment-related measure in the index ranks New Zealand fourth of 155 countries for flexibility in hiring and firing.

Overall, the World Bank says, all economies have different regulatory mixes and, looking at the different mixes, New Zealand’s is about as good as you get in international terms. There is not much evidence in support of the proposed 90-day measure here.”

So if we are already up with the world leaders in the flexiblity of hiring and firing why are National seeking to promote the policy? Perhaps they want to indicate to their supporters that despite their flip flops and absorbing of Labour policy, they so still have a plan that right wing proponents would be proud of?

18 comments on “90 Day no rights makes no sense”

  1. They are not addressing an actual problem with the law, they’re addressing a perceived problem. Small businesses feel like they can’t have probationary periods or fire workers. You run the idea past people and they might say something like “Well, I’ve always thought employment laws were a little stacked on the side of the employee”, or “I know such and such with a small business and they don’t want to hire because they might get stuck with someone”.

    Of course, this is stupid – (AIUI) you can hire someone on probationary terms and at the end of it dismiss them for poor performance. I’d hazard a guess that the employment tribunal is not really out to get employers in this situation.

    I’ve seen a similar thing happen with the Section 59 bill. Parents and Teachers actually think they are no longer able to use any form of force or restraint at all, when really the only restriction is on correction. So they take their perceptions and fears and turn them into reality, without ever reading the actual statute.

    IMHO 🙂

  2. Chuck 2

    Do you think there is a reason the Herald (and you) didn’t mention that Nigel Haworth currently holds the office of immediate past president of AUS, the Association of University Staff?

  3. Wrong Sam Vilain. Start a business and try your method. I look after many businesses and the cost of getting rid of someone seems to be about $50k if they want to stick up and fight it.

    Does a Small Business have that kind of money? The reason people don’t see this is because Small Businesses are too scared to hire people.

  4. infused. That’s not what the studies show (links in earilier related posts). Personal grievances are infrequent and generally not very costly.

  5. deemac 5

    to listen to the Nats you’d imagine running a business in NZ was a minefield of red tape when, as you say, the OECD stats prove it’s easier here than in most other countries. However there ARE a lot of rules you need to observe if you run a business – as my old boss used to say, it it was easy, everyone would do it…

  6. Bill 6

    infused.
    Where do you get the 50k from? PG settlements are not even close to that amount.

  7. roger nome 7

    Infused:

    “I look after many businesses and the cost of getting rid of someone seems to be about $50k if they want to stick up and fight it.”

    That’s patent nonsense. In fact the average settlement cost is below $4,000. You need to stop telling lies.

  8. Greg 8

    I think most of you need to talk to some small business owners. The argument that we’re already 4th in the world so why should we try and do any better doesn’t stand. If we are going to be competitive on the world market we need to strive to be the best, that applies for everything, not just empoloyment relations.

    Sam Vilain – If you look at the law you will see while a probabtionary period is allowed for, these employees have the same rights as regular employees, kind of defeats the purpose doesn’t it? Its not a ‘perceived problem’ its a real one.

    Steve Pierson and Roger Nome – the cost of a bad employee is not just the cost of the settlement if you fire them. This is in fact a very minor part of the cost. The other costs are, lost productivity, the wages you’ve already paid them, the time you other staff spent training them, the cost of advertising for the position again etc etc. Also small businesses generally offer a private pay out to staff (significantly more than $4000, normally 3 months wages) if they agree to leave, the risk of a high settlement in a court case generally prevents a small business from taking it that far – as it could simply cripple their business.

    You have to realise that most small businesses run right at the margin, one bad staff member could easily send them under – and often does.

  9. sdm 9

    Speaking as someone who actually runs a small business, and doesn’t sit in the irovy tower of university, I support National’s proposal. I know that I would employ more staff more often if I had a get -out-of-jail card if they turned out to be unsuitable. You speak of $4000 as if its a nothing sum – well in this economy, to a small business, it is substantial. You talk of “removing workers rights” – what about my right to protect my capital from the dangers of employing bad staff.

    I would be far more willing to take a punt on someone if I knew I wasn’t putting my business (and with it the jobs of my other staff) at risk. I am not just going to fire them without reason – what a waste of my investment (time and money), but rather do everything I can to make the relationship work – but if it cant it cant.

  10. sdm. you want the right to fire someone for any reason that you think is good enough, why should workers vote for that kind of insecurity? they have families to feed they can’t live in the hope that their boss will be graceful and fair – they need to be able to unhold their rights if their boss is unfair.

  11. Dancer 11

    sdm, i’ve been an employer and manager and worked in the employment field. workers take time and effort, but as a general rule your investment pays off. and if you’re worried try this – it’s a probation period that’s already available:

    If an employer and an employee wish to have a probation period, they must agree to this in writing at the start of employment. A probationary employee is a permanent employee who is yet to be confirmed in their position and the probation period provides time for this to occur. Probation periods are also known as trial periods
    Probation period clause

    The following suggested wording for a probation period clause can be used in an employment agreement:

    “A probation period will apply for the first [insert time period] of employment to assess and confirm suitability for the position. The employer will provide guidance, feedback and any necessary support to the employee. Both parties will promptly discuss any difficulties that arise, and the employer will appropriately warn the employee if he or she is contemplating termination. Any termination must comply with the termination clause in this agreement. This probation period does not limit the legal rights and obligations of the employer or the employee, and both parties must deal with each other in good faith.’
    http://ers.dol.govt.nz/factsheets/guide-to-probation-periods.html

  12. roger nome 12

    sdm:

    “I would be far more willing to take a punt on someone if I knew I wasn’t putting my business (and with it the jobs of my other staff) at risk.”

    You know, that may be the case, it may not be. Personally I’m not willing to take the word of an anonymous internet pseudo-name at face-value.

    But the statistics show that people being “locked out of employment” just isn’t a significant problem. Presently only 0.3% of the workforce have been unemployed for a year or more.

    National’s 90 day no rights policy would take away due process in the event of dismissals. This is very bad for three reasons.

    1) It negates the human rights Act, which protects people against dismissal on the basis of religion and sexuality. The HRA also protects workers from being fired for saying no to sexual advances by employers. National wants to introduce a law that will allow employers to place pressure on employees to have sex with them with the threat of dismissal (don’t think employers never try this on).

    2) It gives employers a period of three moths where they can demand that workers do unpaid work, once again using the implicit threat of arbitrary dismissal. Aside from being unjust for workers during their probationary period, this will also lower wages for other workers, as it will effectively lower the price of Labour.

    3) The statistics show that it will primarily affect the working-poor (those working in retail and hospitality) – whose wages have been stagnant for the past 20 years, thus making them even poorer, and making NZ a more unequal society.

    So there’s all these huge negatives, and very little positive. Tell us again why we should vote for it?

  13. sdm 13

    Alright ill respond. I work in the construction sector, and employ a range of people from those fully qualified to apprentices and labourers (who I spend time with trying to move into training and apprentiships).

    In the last 5 years I have got rid of two staff – one for turning to work under the influence (twice) and one for harrassment of fellow staff members. I dont want to get rid of staff – it is counter productive. Dancer is correct – i want to keep staff because the longer they have been with me, the better they probably will be. And I know that to keep them I have to give them regular pay increases, various perks, make the workplace enjoyable etc etc etc. But thats good for me, because fundamentally, the happier they are, the better job they will do.

    Roger nome: you do raise a good point. obviously a breach of the HRA should be illegal, whether within the 90 days or not. Those employers should be dealt with totally. I just feel though that the risk of employing someone now is too high. In my industry, you get people who perhaps havent done so well at school, or maybe have been in trouble with the law or whatever, and you want to give them a chance, but you want the security that if it doesnt work out you will be protected. and remember, if I go under, so do the jobs of those I employ.

    Not all employers are bad….

  14. Billy 14

    Dancer,

    You can say in your agreement that there will be a probationary period but, in fact, it is meaningless. At the end of the probationary period the employer must have a good substantive reason for terminating the employment and must follow exactly the same process as if there were no probationary period.

    Employment of two people on the same day, one with a probationary period and one without, would see the employer having to do exactly the same things in respect of both employees if he or she wanted to terminate both employees.

    So to recap: meaningless.

  15. Anita 15

    sdm,

    Were either of the staff you fired in their first 90 days?

    Have there been any people who you wish you could have more easily fired in the first 90 days?

    I am asking because, in my experience, serious staff problems seem to usually arise well after the proposed 90 day free fire period.

  16. sdm 16

    One was fired in the first 90 days. My solicitor said I could have a problem if they challenged it as unjustified (had to do with soberity at work). So far they haven’t…

  17. Dancer 17

    i was a little slow getting back to this. the question was raised why bother with a probationary period when a boss still needs “a good substantive reason for terminating the employment”. well yes, i think it’s reasonable to have a reason. that’s what i don’t like about the nats fire for no reason approach in the first place!

  18. Kenny 18

    I was terminated for my job 6 days before my 90 with no notice, right after I came back from my 2 weeks in the Guard. I also told my boss before I went on my 2 week duty that it was possible that I could get orders to go active duty ant time, do you think it could be said I was let go because of this, and do you think I have any recourse against this employer

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