Opposition leader Bill English is commending New Zealand First for putting "its foot down" and preserving the 90-day trial for small businesses, a compromise which he says is a sign of a weak Government.
Guaranteed rest and meal breaks and greater union powers are also among the measures in the Government's bill to reform employment law, announced today by Prime Minister Jacinda Ardern and Workplace Relations Minister Iain Lees-Galloway.
Labour, NZ First and the Greens all shifted their positions on the controversial 90-day trial period, which allows employers to dismiss new workers without reason.
Under the bill, the trial period will only be available to businesses with fewer than 20 employees, which currently employ 29 per cent of all workers. Larger firms can still use probationary periods, which do not allow for unjustified dismissal.
Labour had wanted to allow trial workers to challenge unjustified dismissals, while the Greens wanted to ditch the trial periods altogether.
New Zealand First workplace relations spokesman Clayton Mitchell said he would have been happy to keep trial periods for all firms, while more information was sought about how effective they have been.
The Government has now agreed to gather more information.
The announcement followed ANZ's quarterly Business Micro Scope survey, which showed that 29 per cent of small businesses were more pessimistic about the year ahead.
Ardern said keeping the trial period for small businesses was not a response to lower business confidence, but a response to New Zealand First lobbying, prompting Bill English to commend NZ First.
"It's good to see NZ First put it's foot down on behalf of small businesses ... but why not for all businesses?"
English said the Government was "weak" because it needed three parties to agree in order to pass any major policy.
"This is essentially a weak Government. It can be influenced. I would say to NZ First and to small businesses out there, put pressure on this Government. Because these measures are not good for the economy. If they push back, they will get change."
He said the Government needed to justify why the bill is needed.
"New Zealand now has the highest employment rate it's ever had, a bigger proportion of the adult population in work than ever. These measures will cut across that, and will have the most impact on those who find it hardest to get into the workforce."
Others measures in the bill include:
• Guaranteed rest and meal breaks
• The ability to engage in low-level industrial action without the threat of pay deductions
• The right to the same conditions as other workers on a collective agreement, if you're a new worker
• Guaranteed pay and conditions, if you're a vulnerable worker and your employer changes
• A requirement to include pay rates in collective agreements
• Removing the ability of employers to opt out of multi-employer collective agreements
• Requiring employers to provide union information to new staff
• Restoring reinstatement as the primary remedy to unfair dismissal
A union will:
• Have reasonable access to a workplace to initiate collective bargaining
• Be given reasonable time in a workplace to conduct its duties
• Be bound, along with employers, by a duty to conclude negotiations in good faith
The bill will be introduced next week and will pass its first reading with support from Labour, NZ First and the Greens.
Lees-Galloway said the new rules around rest and meal breaks will include exceptions for workplaces such as air traffic controllers, where it was not practical for workers to take breaks at the same time.
"[The bill] sets some very tight criteria. Very few businesses will qualify, but it tries to address exactly the issue raised by air traffic controllers."
The Government will also conduct more research into the trial periods, as there has only been one study, undertaken by Motu in 2016.
That study found no significant positive or negative effects from trial periods, though they had increased hiring in the construction and trade sector, and likely lowered dismissal costs for firms and increased uncertainty for workers.
Other workplace polices have already been put into law, such as lifting the minimum wage to $16.50 an hour by April, and extending paid parental leave to 26 weeks by 2020.
"For the past 30 years, working people have received a diminishing share of economic growth, and we're trying to restore some balance," Lees-Galloway said.
"It is certainly my hope that by giving unions more tools to be able to better represent their members and bargain for better wages that the proposition of joining a union will look a lot better."
The Government still plans to abolish youth rates, but that is in the body of work to be completed in the next 12 months, along with industry-wide fair pay agreements.