KEY POINTS:
The past nine years have been hard on employers, particularly small employers. A Government whose members had little personal experience of an employer's obligations loaded more holidays and other costs on to those obligations and made it fearfully difficult to get rid of an unsatisfactory employee. The new
Government has moved to quickly to restore a balance, at least for small employers.
A speedily enacted law permitting them to hire people on 90 days' probation, with no redress for dismissal in that time, will be welcomed not only by employers but by all conscientious workers, particularly if their existing jobs are at risk in the present international climate. Workers should welcome it because there can be no better incentive to additional employment than a reduction in the risk that a new employee represents to a small business.
Capable and conscientious workers have nothing to fear. In the ordinary course of business employers do not go to the trouble and expense of hiring somebody only to dismiss them lightly and go through the whole costly, time-consuming exercise again. In an ideal world recruitment methods would be foolproof and the need for a probationary employment period would not arise. But in the real world the best selection procedures will occasionally fail to ensure a job applicant is reliable and temperamentally suited to the job.
The same is true for the applicant, of course. But if the job or boss proves unbearable the newly hired employee can leave at will. Despite the passage of the "fire at will" law, as critics call it, it is a fair bet the number of employers who invoke their newly acquired right will be a fraction of the number of employees who quit a job without warning, due notice, discussion or reason.
That can happens to the best employers at any time. Small business owners can be left scrambling to cover a sudden departure as they urgently seek a replacement. There is nothing the law can reasonably do to prevent it, but the right to quit at will should be remembered when labour unions rail at the 90-day probation bill.
The only real objection to the law can be the haste with which it was passed. It was not on National's urgent list before the election, though it was long-standing policy and the subject of a member's bill that was defeated in 2006. It is not on for National to argue that it can subvert normal parliamentary scrutiny of this legislation because a select committee heard all the arguments two years ago. National is in power now and must consider its legislation more carefully.
It is unfortunate also that this law was passed without discussion with the Maori Party. National did not need that party's support, Act supplied sufficient votes, but it augurs badly for the partnership forged a few weeks ago that the Maori feel their position was slighted. They had, after all, honoured the agreement with support for tax cut legislation that exposed them to Labour's ridicule.
The Government's only justification for the haste can be the fear that international economic conditions will soon see widespread lay-offs. In these circumstances the country would need domestic consumption to take up the slack from lower export sales. If there is any capacity for more employment it is likely to be found in small, owner-managed businesses that have been ripe for expansion but dissuaded by the legal risks associated with taking on responsibility for full-time staff.
They have a Government that sympathises with them and has demonstrated its sympathy with swift action rather than words. That action alone may have done more to boost business confidence and employment than we dare expect.