The head of the one of the country's biggest unions has waded into the 90-day trial period debate, saying that the legislation is having a "devastating effect" on young people.
The trial period let employers sack workers at the beginning of their working lives without having to give a reason why, Bill Newson, national secretary of the EPMU, said.
His union was encountering increasing numbers of people whose employment had been terminated under the 90-day rule, he said.
"Typically they are young, haven't been told why and they tend to have been sacked on the 89th day," he said.
"Not a single job had been created" by the new legislation that would not have been created by the earlier probationary employment clause of the Employment Relations Act, Newson said.
"Underlying this whole debate is that there needs to be the ability for a trial period, but that trial period needs to be fair."
Previously, employers using the probationary clause had had to tell employees what they would be looking out for while they were on a trial period, Newson said.
"Examples could be timekeeping, doing what your CV said you could do, taking direction from a line manager or working in a team," he said.
"This way someone knows what they are being trialled on, whether they needed to lift their game, and what they needed to do to do that."
Young people who had suddenly been dismissed "didn't want to make a fuss", but their parents were contacting the union on their behalf, Newson said.
"Parents come to us, worried about their children's future. When they find out there is nothing they can do about it, they get angry" he said.
Phil O' Reilly, chief executive of business advocacy group BusinessNZ, took a very different view.
The 90-day trial period was helping people on the "margins" of the employment market to find jobs, he said.
"What we are hearing is that employers are more likely to give someone a job that they otherwise would not have done."
Employees with an "increased perceived risk" such as the unskilled, lower skilled, or people who were returning to job market after an absence, were finding it much easier to get a job, O'Reilly said.
He questioned figures from the Ministry of Business, Innovation and Employment that revealed 27 per cent of employers said they had fired at least one new employee during or at the end of their trial.
People who had been sacked in this way were not necessarily unemployed as the trial period could also have helped the same people to move into another job the next week, O'Reilly said.
Dave Feist, managing director of Employment Dispute Services, said the 90-day trial period had affected the number of cases that the company was prepared to take on a "no-win, no-fee" basis.
"It's definitely reduced the number of clients we take on," he said.
However, a lot of employers were leaving themselves open to personal grievance actions because they were not aware of the new law, Feist said.
"A lot of employers don't realise that without a signed employment contract they won't be able to use that law to protect themselves."
About a third of the personal grievance cases that EDS dealt with involved employers who had failed to get a signed agreement before employees had physically started work, Feist said.
"What often happens is that someone will come round a week after the new employee has started and ask them to sign something, but that's too late."
Phil Butler, director of Christchurch-based employment law advocacy firm Phil Butler Associates, said the 90-day trial period was "the No 1 issue" when he was advising new employer clients for the first time.
"If employers get it wrong and the employee has a personal grievance after their employment has been terminated without any process, they are on a hiding to nothing," he said.
"In those cases we do a kind of cost-benefit analysis," Butler said. "We tell them: a) you are going to lose and b) this is what it's going to cost you, in fees and compensation."
Employment legislation changes since the 1980s had proved to be a boon for the legal profession generally, Butler said.
"It used to be there were only about 10 law firms providing employment advice in New Zealand. Now almost every practice in the country has someone who specialises in employment law."
O' Reilly at Business NZ agreed that many employers, particularly small businesses, did not properly understand how the 90-day trial period worked.
"However, that's not necessarily a problem with this particular statute. That requirement for a written contract has been there for years but there are still lots of small businesses that are operating in ignorance of that," he said.
"That's despite the best efforts of everyone – the Government, the unions, us. Education on this is a big job for everybody."
- Fairfax Media
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