Government announces major changes to 90-day trial periods

The Government will limit 90-day trial periods to businesses with fewer than 20 employees.

The trials will be scrapped for all larger businesses.

90-day trials were introduced by the National Government for small businesses in 2009 and extended to all employers in 2010. They allow employers to 'trial' new employees for up to 90 days.

The idea was to encourage employees to take on higher-risk job seekers.

A Treasury-funded study published in 2016 found no evidence the trail periods had any impact on the number of people hired, including the hiring of disadvantaged jobseekers.

Keeping the trials for small businesses is a win for Government coalition partner New Zealand First.

"It was New Zealand First who wished there to be that carve out to allow small businesses to use 90 days," Prime Minister Jacinda Ardern said at the announcement on Thursday.

Most of the new Government's other workplace changes will do away with employment law changes introduced by the previous National Government, largely concerning union rights and collective bargaining.

New proposals are all union-based. They include a requirement to pay union delegates for representing other workers and greater protections against discrimination for union members.

Major roll-backs are:

  • Restoration of statutory rest and meal breaks
  • Restriction of 90 day trial periods to SME employers (less than 20 employees)
  • Reinstatement will be restored as the primary remedy to unfair dismissal
  • Further protections for employees in the "vulnerable industries" (Part 6A)
  • Restoration of the duty to conclude bargaining unless there is a good reason not to
  • Restoration of the earlier initiation timeframes for unions in collective bargaining
  • Removal of the MECA opt out where employers can refuse to bargain for a multi-employer collective agreement
  • Restoration of the 30 day rule where for the first 30 days new employees must be employed under terms consistent with the collective agreement
  • Repeal of partial strike pay deductions 
  • Restoration of union access without prior employer consent

New proposals are:

  • A requirement to include pay rates in collective agreements
  • A requirement for employers to provide reasonable paid time for union delegates to represent other workers (for example in collective bargaining)
  • A requirement for employers to pass on information about unions in the workplace to prospective employees along with a form for the employee to indicate whether they want to be a member
  • Greater protections against discrimination for union members including an extension of the 12 month threshold to 18 months relating to discrimination based on union activities and new protections against discrimination on the basis of being a union member.