Tens of thousands of workers have been sacked under the 90-day-trial period, with many let go because they "did not fit in".
Figures published by the Ministry of Business, Innovation and Employment show about 69,000 employers took on at least one new staff member in 2012 under the legislation.
It is not known how many workers were dismissed during the 90-day-trial period, but the figures revealed 27 per cent of employers said they had fired at least one new employee during or at the end of their trial.
This means at least 18,000 people lost their jobs in the first three months of employment last year, with the actual figure likely to be much higher.
When asked why they had dismissed staff, most employers said it was because they were unreliable or had a bad attitude. Other reasons included employees not having the necessary skills, not getting on with colleagues, and not fitting in.
The law has been widely criticised by unions and the Labour Party, which says it will repeal it if it is elected next year.
But Hospitality New Zealand Wellington president Jeremy Smith praised the trial period, claiming it had been positive for both employers and employees.
Mr Smith, who owns several bars and hotels including The Old Bailey, St Johns and the Cambridge Hotel, said he had hired dozens of staff he would not otherwise have considered.
Because of the transient nature of hospitality, it was often difficult to check references so a trial period "levelled the playing field".
"We're in a position now where we're a lot more comfortable giving people an opportunity."
Recruitment worker Sam Clemens was fired from his job last month just before his 90-day-trial period expired.
Despite being headhunted for the job, meeting all his targets and getting along well with other staff, a strained relationship with a senior manager meant he was let go.
Although he believes he was unfairly treated, Mr Clemens is a supporter of the legislation and can see its benefits.
But loosening up the rules to allow employees more leeway to bring disputes when they believed they had been unfairly treated was needed, he said.
Former Stokes Valley Pharmacy employee Heather Smith, who won a court battle after being dismissed under the trial period in 2009, believed it was too easy for employers to exploit the law.
They could use the legislation to hire several staff and then get rid of the rest when they found the one they wanted, she said.
Council of Trade Unions general counsel Jeff Sissons said that more than two years after the law was introduced, workers were still contacting the union complaining they had been fired unfairly while on a trial period.
If an employer went through a proper and robust hiring process, there was no need for a trial, he said.
Labour Minister Simon Bridges believed the legislation was working well.
In 2012, more than 131,000 people were employed on a trial period and nearly a third of all employers who used the trial period said they would not have hired their most newest staff member without it, he said.
Early next year, the ministry intended to publish research in which employees were surveyed, he said.
WHAT IS A 90-DAY TRIAL?
First introduced in March 2009, allowing employers with fewer than 20 staff to include a trial period of up to 90 days for new employees.
In April 2011 it was extended to all employers.
The trial period must be agreed to in writing and negotiated in good faith.
If an employee is dismissed before the end of a trial period, they can not raise a personal grievance on the grounds of unjustifiable dismissal.
But they can still raise a grievance on other grounds, including discrimination or harassment, or unjustified action by the employer.
Notice must still be given within the trial period.
A trial can be offered only to a new employee who has not worked for the employer before.
- The Dominion Post
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