90-day trials watered down, but survey shows they work

Wed, 01 May, 2019

As the Labour-led Government waters down ACT’s 90-day trial policy, a new survey of almost 1000 firms shows it is working well, says ACT’s Small Business and Employment spokesman Stephen Berry.

From 6 May, the Employment Relations Amendment Act will restrict 90-day trial periods to employers with fewer than 20 staff. But according to a new nationwide survey conducted by the Employers and Manufacturers Association:

• 77 per cent of firms say the 90-day trial period is an extremely important part of hiring decisions
• 90 per cent said they kept employees on after a trial period, with 94 per cent of workers remaining for more than 18 months
• 38 per cent said they had not let any employees go and 37 per cent had let between one and two employees go
• 39 per cent of respondents who had between 19 and 50 staff said removing 90-day trial periods would negatively impact the way they hire staff.

“Firms are very clearly saying that 90-day trials have given them the opportunity to take a chance on workers they wouldn’t otherwise. Young or low-skilled workers, or people who have been out work, have the most to gain from being employed on a trial basis”, says Mr Berry.

“If an employer discovers they’ve taken on a worker who can’t perform or isn’t a good fit, it’s a cumbersome process to manage their performance, and can be financially catastrophic if they get it wrong.

“The survey shows claims that firms would exploit new workers by terminating the employment relationship at 89 days are false. Motu’s research on 90-day trials also found no evidence of firms exploiting the law.

“Recruitment is an expensive and risky exercise. The idea that firms would hire and train new staff only to then fire them is fanciful.

“Removing the ability of firms to use 90-day trial periods will increase the risk associated with hiring and will hurt the very people Labour claims to care about.

“A truly compassionate government would make it easier for vulnerable New Zealanders to find work and live independent and productive lives.”