29 Aug 2023

National confirms it would reinstate 90-day trials

12:44 pm on 29 August 2023
National Party leader Christopher Luxon

Photo: RNZ / Angus Dreaver

National's leader Christopher Luxon has confirmed the party would bring back the old settings for 90-day trials.

He also says he has no plans to reverse the current 10 days of sick leave.

"Yes, we will bring back 90-day trials. We think that's a good way for an employer to take on an employee - particularly when we have 55,000 more New Zealanders on unemployment benefits today at a time of record low unemployment and also lots of worker shortages," Luxon told reporters on Wednesday.

Supporters of the scheme argue it means employers are more willing to take hiring risks, while opponents say it means job instability - particularly for marginalised workers.

Labour in 2017 had campaigned on abolishing the trials which allowed any employer to dismiss workers without cause within their first 90 days of employment. The changes it made in coalition with NZ First, however, merely limited the trials to small businesses with 19 or fewer employees.

National had brought the trials in when last in government. It tested the scheme in small businesses for some industries in 2009, rolling it out nationwide in 2011.

BusinessNZ has identified the reinstatement of the full scheme as a wishlist item in its Election Priorities.

Research from Motu in 2016, commissioned by Treasury, found "no evidence that the ability to use trial periods significantly increases firms' overall hiring", and "no evidence that the policy increased the probability that a new hire by a firm was a disadvantaged jobseeker".

It also did not appear to affect the likelihood of new hires remaining in the long term, or make workers less likely to move jobs. The researchers did find a weak increase in hiring in the construction and wholesale trade industries, however.

"The main benefit of the policy was a decrease in dismissal costs for firms, while many employees faced increased uncertainty about their job security for three months after being hired," the research concluded.

Luxon, asked whether he would also reverse Labour's move to double sick leave from five to 10 days, had no plans to change it at this point.

"It is what it is now, and it's passed," he said.

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