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Home / Business / Small Business

Plan makes sacking workers easier

Derek Cheng
By Derek Cheng
Senior Writer·NZ Herald·
18 Jul, 2010 04:00 PM4 mins to read

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The test for justified dismissal will be changed from what a reasonable employer 'would' do to what a reasonable employer 'could' do. Photo / Dean Purcell

The test for justified dismissal will be changed from what a reasonable employer 'would' do to what a reasonable employer 'could' do. Photo / Dean Purcell

Have you been hired or fired under the 90-day trial law?
Tell us your story.

The Government's changes to employment law will swing the balance of power in favour of bosses and expose workers to easier dismissal, an employment law specialist says.

But barrister Jane Latimer supports the changes that will affect personal grievances, as they will make the system fairer.

Prime Minister John Key formally announced the plans yesterday at the National Party's annual conference, including the extension of the 90-day trial for new workers to all businesses.

The scheme, which means workers cannot take a personal grievance claim if they are fired except on discriminatory grounds, at present applies only to companies with fewer than 20 staff.

The proposal has been met with staunch opposition from unions and the Labour and Green parties.

Further changes to the test of how a boss can fire workers are being described as a major shift in power in employers' favour.

The law says a boss's actions are justified if they are what a "fair and reasonable" employer would have done.

The wording will change from "would" to "could", effectively lowering the test for how a boss needs to have acted; instead of just one course of justified action, there could be many types of justified action.

Ms Latimer said it will be easier to fire workers, but it will still have to be fair and reasonable.

"The law at the moment is unreasonable and difficult to interpret, and in some cases the onus has been too tough for the employer.

"It doesn't make it totally pro-employer, but it will take into account that there are different employers who have different values and different standards."

Other major changes include empowering the Employment Relations Authority to dismiss trivial cases, and not requiring "pedantic scrutiny" of process.

Labour Minister Kate Wilkinson said there were cases where the reason for firing a worker was justified, but the decision went against the employer because they failed to dot every 'i' or cross every 't'.

She released intended changes to the Holidays Act yesterday so workers can choose to trade in a week of their annual leave for cash.

Other changes include bosses being able to force workers taking sick days to prove they're sick - though the boss has to foot the bill.

The changes, with the support of the Act Party, will have the numbers in Parliament to pass into law, though Mr Key said they would go to a select committee so the public could have a say.

Ms Wilkinson said she was not concerned at anecdotal examples of employers misusing the 90 day-trial scheme.

"If there are only one or two examples of employers behaving badly and there are heaps more of employees getting a job they might not otherwise have got, then that is a good thing."

A Department of Labour report showed that 40 per cent of employers who used the scheme would not have, or were unlikely to have, hired a person without a trial period.

Meanwhile, Mr Key challenged opponents of the scheme to come up with concrete examples of employers abusing the scheme.

He said the scheme would appeal to those at the margins, including migrants, prisoners being released or mothers returning to the workforce after having a baby.

Major changes

* The test for justified dismissal will be changed from what a reasonable employer "would" do to what a reasonable employer "could" do.

* Enabling the Employment Relations Authority to throw out cases with no merit, and to pay more attention to the right outcome, rather than "pedantic scrutiny" of process.

* Allowing authority members to penalise parties who fail to attend investigation meetings.

* Being able to trade the fourth week of holiday leave for cash, if employers and employees both agree.

* 90 day-trial for new workers to be extended to all companies.

* Union access to workplaces to require employer consent, which cannot be unreasonably withheld.

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