Job numbers boost 90-day trial periods

Research has shown 90-day trial periods have had a positive impact on job numbers for small businesses, but unions are not impressed.
Minister of Labour Kate Wilkinson pointed to a New Zealand Institute of Economic Research study on the impact of the trial period in its first six months, from March 2009, as evidence it was boosting employment.
"Unemployment peaked at 7.1 per cent that year and, considering the economic conditions small businesses were operating under, the indication that hiring was almost six percentage points higher than expected is extremely good."
Wilkinson said total job numbers for those firms were also about two per cent higher than expected.
"Trial periods are a policy of opportunity and it's pleasing to see this early data showing small businesses have utilised them effectively."
The minister said the study put opposition from Labour and unions into perspective.
"Employers have already shown they are more willing to take a chance on someone they otherwise wouldn't and this is where a trial period is valuable."
The period, which currently allows businesses employing up to 20 staff to dismiss new workers without justification after a 90-day trial, will be extended to all New Zealand businesses from April 1 and Wilkinson expects to see a similar increase in hiring among larger employers as a result.
"It's still early days for this policy and, eventually, there will be more data to analyse its effectiveness. I'm confident the benefits to New Zealand will be obvious, just as they have to the rest of the developed economies in the world that apply a grievance-free period."
Council of Trade Unions President Helen Kelly has described the report as "another feeble attempt to justify this unfair law".
She insisted nothing in the survey contradicted the union's claims that the law allowed bosses to sack people for no reason.
"The claim that hiring has declined less in small firms than in bigger ones is hardly a ringing endorsement."
She pointed to figures showing people receiving the unemployment benefit dropped from 162,000 in 1999 to 17,465 in May 2008 without this law. But, in June 2010, after 15 months of the 90-day trial period, there were 62,085 receiving unemployment benefit.
"A firm's economic situation is the influence on hiring. Larger firms have said they don't want or need this law, but once in place, they too will use it to unfairly sack people," Kelly said.