Business leaders have welcomed a bill making it easier for small employers to fire workers within 90 days, while unions have called it an assault on workers' rights.
The bill, which gives a 90-day probation period to firms with fewer than 20 workers, will be passed under urgency before Christmas, without being referred to a select committee.
Northern Employers and Manufacturers Association employment services manager David Lowe said the introduction of a probationary period would give employers confidence to hire.
Business New Zealand chief executive Phil O'Reilly also said most developed countries have laws of this sort.
"Many have much wider laws that this applying to trial periods for new workers. What we are really talking about here is giving be people a chance at a new job."
"There are other people who really need employers to give them a chance - immigrants, people with perhaps a chequered background, mothers returning to the workforce."
He said New Zealand and Denmark are the only countries in the OECD without probationary periods.
Unions say the bill is undemocratic and the biggest assault on workers rights since the Employment Contracts Act of the 1990s.
The Unite union represents low paid workers in businesses such as cinemas, call centres, and fast food outlets. National director Mike Treen said the government is handing bosses the right to exploit their staff at will.
Figures released by the Public Service Association, which represents state service workers, show 700,000 people change jobs each year.
General secretary Richard Wagstaff says for these workers, changing jobs is about to get riskier, and the new legislation will deter many from moving employment.
Primary teachers union NZEI says many teachers must move around to gain promotion and experience.
NZEI president Frances Nelson said the probationary period is likely to persuade many teachers to stay put, which will worsen teacher and school staff shortages.
Labour Minister Kate Wilkinson told Morning Report the proposed law will give firms that are struggling against a tough economic backdrop confidence to take on new workers.
She said unions are exaggerating the situation and the bill does contain safeguards for workers, including mediation and good faith provisions.
Prime Minister John Key said the probation period will help boost employment. He rejected criticism that the approach is anti-democratic, saying there will be safeguards in the legislation and the issues have already been widely canvassed.