Employee probation period could rise

Workers will fight any moves to increase the 90-day probation period for employees in small firms as part of a planned revamp of personal grievance rules.

A discussion paper issued by Labour Minister Kate Wilkinson this morning says lengthening the period could help small businesses better cope with employment problems, which disproportionately affect them.

Engineering, Printing and Manufacturing Union secretary Andrew Little said the union would cooperate with the review, but would fight any moves to extend the 90-day “fire at will” provisions.

“The ability to take away someone’s economic livelihood is a huge amount of power, and it’s a basic democratic right that all workers have access to natural justice.

“It is not encouraging that these natural justice rights have already been denied to thousands of workers in small businesses through the 90-day fire at will law and we will oppose any attempt to extend this period or apply it to the majority of Kiwis who work for large employers.”

He said the EPMU – the biggest private sector union, covering 45,000 workers – agreed with the need to regulate “opportunistic no win, no fee” advocates and for better information and assistance for small and medium businesses about their rights and obligations.

“However, it’s crucial that this review is based on evidence and that when the minister hears employer complaints about our dismissal laws she is able to distinguish between the usual whinging and moaning on the one hand, and the genuine problems on the other.”

The discussion paper also floats the idea of extending the 90-day provision to employers with up to 49 workers - though it makes clear the Government is not actively considering any particular option, but is seeking views on possible ways forward.

National introduced 90-day employment probation periods for businesses with fewer  than 20 workers within weeks of winning the 2008 election.

The law allows these employers to dismiss new workers within the probation period without fear of being exposed to a personal grievance, though there are protections for workers in cases of sexual harassment or racial discrimination.

Employers with fewer than 20 staff make up 97 per cent of all New Zealand businesses, accounting for three in ten workers.

The discussion document says these employers often lack the procedures, resources and experience to deal with employment problems and research in 2007 found the incidence of cases per 100 workers was higher in these companies than larger ones.

The paper says the problem is compounded by the lack of union representation in many small workplaces, which can help defuse problems before they reach a head.

The paper also floats the idea of regulating personal grievance advocates who operate on a 'no win, no fee' basis.

Options for discussion include requiring them to belong to a professional body with the power to discipline those who take frivolous cases or fail to competently represent their clients.

It also asks whether the test of justifiable dismissal should revert back to what a reasonable employer might have done in the circumstances, rather than present test of what a reasonable employer would have done.

Other areas for discussion include removing reinstatement as a primary remedy and increasing the financial penalties available for workers who are wrongly sacked.

It also discusses ways to speed up personal grievance cases, including through video conferencing, and helplines to inform workers and employers about their rights.

Ms Wilkinson said the paper followed concerns about the personal personal grievance system, including uncertainty about the law and the ability for parties to spin out the legal battle for years, but promised any changes would balance the rights of workers and employers.

"It is important that perceived and real problems are addressed, while continuing to balance that with maintaining rights in genuine grievance cases.

"I want to hear from people who have direct experience of the personal grievance process and also those who may not have had direct experience, but whose understanding of the process affects their decisions or behaviour in the workplace."

A copy of the terms of reference for the review and the discussion paper can be found on the Labour Department website at www.dol.govt.nz/consultation.

Submissions close on 31 March.

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