90-day trial a 'safety belt' for employers

A Department of Labour report shows bosses are pleased with the 90-day trial period, but not all workers agree. Photo / Herald on Sunday

Employers are pleased with the 90-day trial period for new workers, though workers sometimes feel vulnerable and mistreated, a Department of Labour report shows.

Prime Minister John Key is expected to announce an extension of the scheme to all companies - not just companies with less than 20 staff - at the party's annual conference tomorrow.

The report, released to media today, was a result of surveys between October 2009 and May this year.

It found that 87 per cent of employers thought the trial period were working "very well" or "quite well".

"Employers were very positive about how well the trial periods were working for them," the report said.

But it found some workers were unhappy with it.

"Those experiencing trial periods had a range of views, recognising some benefits for themselves and employers, but also feeling vulnerable to unfair treatment and job loss."

One employee said: "The fact that they did get rid of me just like that made me really bitter."

The report found some instances of misuse, which happened most often when businesses changed ownership.

In one case, a union official thought he was dismissed because he was a union member, though a note from the employer said it was a performance issue.

In another case, a worker was dismissed because of inexperience, even though she had worked for the previous owner in the same business for a number of years.

Another case reported by a union official found that a worker with a disability was asked to sign up to the trial period after two weeks of work, and was then dismissed.

The report found that three-quarters of those on the scheme kept their jobs after the the trial period expired (a further 5 per cent were still in the trial period at the time of the survey).

Twenty-two percent of those on the trial were fired.

Two-fifths of employers said they would not have hired workers or were unlikely to have hired workers if the scheme had not been available. A majority - 57 per cent - said they would have hired the worker anyway, or would have been likely to.

Employers said they would all continue to use the scheme if it was available.

"Basically I view it as a bit like a safety belt. You don't actually need a safety belt, but you'd be crazy not to put it on. Do you want to take that risk?" an employer is quoted as saying.

Another called it a "brilliant idea".

Four-fifths of employers used the scheme to check that the new worker was suitable; 35 per cent said they used it so they could fire unsuitable workers.

The most common age bracket of the new worker on the scheme was 15- to 24-year-olds, which made up 43 per cent of the workers on the trial.

Employer awareness of the scheme was high: between 62 per cent and 74 per cent knew several key details, but comprehensive knowledge was less common.

By contrast, employee understanding of the scheme was less comprehensive.

The report added that there was no cost to run the scheme, and there were indications that a simplified dismissal process ended up saving money.

The scheme was brought in by the Government last April.

It allows companies with less than 20 workers to hire new workers on the scheme, if they agree to it. Under the scheme they have a 90-day trial period, during which the worker can be dismissed without bringing a personal grievance case against the employer, unless it is on discriminatory grounds.

John Key is also expected to announce a policy on union access to workplaces tomorrow.

The 2008 party manifesto was to allow employers to block union access to workplaces if it was reasonable to do so.

Unions have reacted angrily to the expected changes, and plan to hold protests at the conference tomorrow.

The report said 527 employers completed both the initial and follow-up survey.

Of those, 132 had hired new workers under the scheme.

The qualitative research involved interviews with 31 people, including 15 employers, 13 employees, two union officials and a person from a social support agency.

KEY POINTS

- 87 per cent of employers thought the trial period worked "very well" or "quite well"

- Some workers felt vulnerable or that they had been mistreated

- 40 per cent of employers said they would not have hired the workeR, or were unlikely to have, if the scheme had not been available. 57 per cent they would have hired anyway, or were likely to have hired anyway

- 22 per cent of new workers were fired after the trial; three quarters were retained

- 43 per cent of those workers on the trial period were aged between 15 and 24

- 20 per cent of the workers were of Maori/Pasifika descent