New Zealand is a funny old place. We're good at laughing at ourselves and our occasionally cringe-worthy "small country syndrome". At the same time, we're proud of our outstanding achievements on the sports field, and punching above our weight on issues like nuclear-free energy and women's rights.

History shows us that small size is no barrier to excellence. Especially with the winning Kiwi formula of giving everyone a fair go and working as a team of equals. And it's the same with business.

The Government is in the middle of repairing employment laws, but it's treating small businesses differently.

90-day "fire at will" trials introduced by National are being scrapped, but not for businesses with fewer than 20 staff.

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The trials mean employers can flick off an employee in the first 90 days without a reason, as if they were trying on a pair of shoes.

The National Party says the trials create job openings for people with "features that make them different" — someone coming out of prison or returning to work after maternity leave. Apart from the obvious actual or perceived risk of discrimination when no reason is given for letting someone go, the trials don't actually create jobs. Businesses hire staff when work needs doing.

Even when the fire at will option isn't taken by employers, the existence of the trial period can poison a work environment without the owners even realising.

When you hire someone, you're putting your trust in them to do the best for you and your business. In return, they're putting their trust in you to provide income. It's not a small decision for anyone — there are incentives on both sides to make it work out. But if they know that you can show them the door without warning, are they going to speak up and tell you if something isn't right? How personally invested in you do you think they'll feel with less income or job security than other staff? Most employers don't intend to create a climate of anxiety, but our members tell us the fire at will law does just that. And eager new employees are often too nervous to let you know.

Some business lobby groups say it's harder for smaller outfits to run proper employment processes including hiring and firing. The logic goes that with no dedicated HR adviser, there's greater room for mistakes and misunderstandings — which still open a business up to scrutiny and legal challenges. But when there's no obligation to run a performance-improvement process or give employees a warning, there is little incentive for small businesses to upskill to best practice.

When we presented to the Select Committee on this law last month, we were asked whether businesses needed protection from "bad employees", like someone stealing from the till. It should be clear by now there is ample ability under employment law without using a 90-day trial to address poor performance, including the ability to dismiss someone where warranted.

That's one extreme example. On a day-to-day level, I'm equally disturbed that some people don't realise you can get the best out of people by communicating regularly about what they're doing right and what they could do better.

It's cheaper and easier for businesses than going straight to dismissal and the hassle of finding new staff.

We don't want to create a two-tier system where small businesses are looked down on as too little to treat people with dignity and do things right. If people have fewer rights and job security working for a small employer, they're more likely to jump ship to the bigger business that already has market advantage.

So let's not accidentally make a false diagnosis of "small business syndrome" which misunderstands the integrity and potential of local business owners.

If we approached rugby with the mentality that it's all too hard because New Zealand is too little, where would we be? We should expect the best from our businesses too — big and small.