The 90-day trial employment period may not have created a single new job, research shows.
The trial period was introduced in 2011 with the intention of lowering employers' compliance costs and creating new jobs.
The Ministry of Business, Innovation and Employment's evaluation of the short-term results of its introduction shows it is being widely used. A survey of employers found that 59 per cent used the trial periods, mostly in the construction, trade and retail, and accommodation industries.
Of those who had used the trial, more than a quarter said they had dismissed at least one staff member in 2012-13, up from 19 per cent the previous year.
A third also said they had hired someone they usually would not have considered for the job because the trial period gave them a "safety net". However, the ministry warned it was not possible to determine whether that meant there had been a "net increase" in employment.
Employers and Manufacturers Association general manager David Lowe said the introduction of the trial period had been beneficial for employers and employees.
Its own survey of 518 employers showed that 69 per cent were using the trial period, and 8 per cent said they had hired for a new position or a position that had been disestablished.
When asked about the number of people dismissed under the trial period, Lowe said it was a fact of life that not all employment situations came to a happy end.
"Employers do not hire people with the intention of letting them go, that's not what happens.
"People are getting jobs that they never would have got before and it's the people the community is most concerned about."
Within the OECD, only Denmark did not use some kind of trial period, he said.
But Council of Trade Unions president Helen Kelly said this was no reason to adopt a policy that was flawed. "What did your parents say to you when you said: ‘Everyone else is doing it?' "
The research showed that minorities such as Pacific and Asian workers were more likely to be employed on a trial period and therefore more likely to be exploited.
Kelly described this as "discriminatory", and was also critical of the ministry's research methods. It had interviewed only 20 employees in depth and none of them had been dismissed during or at the end of the trial period.
There were thousands of people being fired under the policy and there was not "a shred of evidence" that new jobs had been created.
- The Dominion Post