Wednesday, May 03, 2006

David Lowe: Committed employees have nothing to fear

Wayne Mapp's bill providing a 90-day grievance-free period means employees will be given a chance to show they can do the job. Some employees are missing out on jobs because employers are not prepared to take a chance on them.

A whole range of people need employers to be able to take a chance on them, including people with overseas qualifications, new immigrants, those with no recent work experience, as well as those wanting to step up in their careers or change their career path.

Under the present law, moving on an employee who is not working out can take a long time and be very hard on a business and other staff.

The huge employment grievance industry is one of employers' biggest problems.

An initial trial period to see how things work out is commonly used in other aspects of our lives and makes sense in employment too.

Many countries overseas have very similar legislation, including Australia, Britain and Poland.

Fears that a grievance-free period will be abused by employers are unfounded because good staff are hard to find and no reasonable employer will invest time and effort in taking on new staff just to avoid the risk of a future grievance.

Employees prepared to put in a good day's work would have nothing to fear from the type of probationary work period envisaged.

The Employers' and Manufacturers' Association is recommending that some features of the present Bill unrelated to the grievance-free trial period are removed, to ensure employees' minimum statutory employment conditions are not compromised.

In its "scorecard" of the Government's performance in helping small and medium-sized enterprises, the Small Business Advisory Group called the introduction of a probationary period the "single most important change needed in employment law".

The group has consistently identified the fear of hiring new employees as a significant impediment to business growth, since its establishment by the Labour-led Government in 2003.

The Ministry of Economic Development has found that small businesses' inability to grow into larger enterprises is one of the biggest roadblocks to New Zealand's economic performance.

Successful claims for unjustifiable dismissal cost employers an average of $8790 in awards, and more in terms of legal fees and time off work defending the allegation.

Though a finding of "unjustifiable dismissal" suggests an employer has sacked an employee without any good reason, in most cases the employer has simply failed to follow the strict formal procedures required as laid down in the somewhat arcane formulations of the Employment Court and the Court of Appeal.

Currently, the Employment Relations Act allows employers and new employees to insert a so-called "probationary arrangement" in their employment agreement.

However, the Act specifically states that the agreement between the parties does not change any of the law relating to unjustifiable dismissal. In other words, it allows for probationary periods but stipulates they can have no practical effect.

Because the consequences of employing the wrong person can be serious, many employers adopt a low-risk approach to recruitment. For example, teenagers currently have an unemployment rate four times the national average.

The frustrations often faced by highly qualified immigrants in getting their first chance in the job market are well documented.

Other disadvantaged groups, employment-wise, also stand to benefit strongly from such a provision, including people with interrupted work histories, such as long-term beneficiaries or parents returning to the workforce.

All these groups deserve the chance to prove themselves. Employers want to give them a go, but they don't want the expense if things sour.

Though unions may sometimes act as if a no-fault probation period is the end of the world, this is not borne out by experience in other countries. Many of our major trading partners have probation periods, and many also have strong trade union movements.

In Australia, while each state has its own governing legislation, all allow for probation periods of at least three months. A recent review of federal labour laws means that soon all states will share a common six month no-fault probation period.

In Britain, every employee is subject to a "qualifying period" of 12 months. During this time, the employee cannot bring a claim for unfair dismissal (the same as an unjustifiable dismissal).

Even Germany, which has some of the most strict unjustified-dismissal laws in the world, does not extend these protections to workers until six months' service has been completed.

In fact, all OECD nations except Denmark - and New Zealand - have legal probationary periods in some form.

Employers do not want open slather to tread on the rights of employees.

Where lengthy probation periods are available overseas, employees are still protected from discrimination on the basis of sex or race. They cannot be dismissed for exercising their rights under other laws, such as joining or refusing to join a union, taking parental leave, or whistle-blowing for health and safety reasons.

Employees have every right to claim unpaid wages during the first three months of his or her employment or any other time.

A fine-tuned bill that meets the needs of employers, encourages more job creation, and protects employees' fundamental rights would be like a lottery where everyone won.

* David Lowe is Employment Services Manager for the Employers' & Manufacturers' Association (Northern) Inc.


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