The ‘90-Day Bill’ – What’s The Fuss About?
The Employment Relations (Probationary Employment) Amendment Bill
has created intense political lobbying by pro-employer and union groups. Although
the Bill is yet to pass its second reading in Parliament, there are
media reports of heated exchanges between the two groups, full-page
advertisements and rallying by union groups in the last few weeks. So,
what is all the fuss about?
If passed, this private member’s Bill will introduce a 90-day
probationary period for new employees in the Employment Relations Act
2000. Its key provisions are:
- The probationary provisions will only apply to employees who have
agreed to serve a period of probation or trial;
- There is a maximum period of 90-days to which the probationary
provisions will apply, although employers and employees can agree
to a lesser probationary period;
- Either the employee or the employer can terminate the employment
relationship (with immediate effect) at any time during or at the
end of the probationary period;
- If the employment relationship is terminated during the probationary
period, neither party can commence proceedings under the ERA. However,
employees are still able to commence proceedings under the Human
Rights Act, the Parental Leave and Employment Protection Act and
other legislation that protects employee rights.
Although section 67 of the ERA provides that ‘probationary arrangements’ are
lawful, it also provides that this does not affect the application
of the law relating to unjustifiable dismissal. In other words,
even if an employee agrees to enter into an employment agreement that
is subject to a 90-day probationary or trial period, the employer must
ensure that any dismissal is carried out in a procedurally fair manner
(i.e. following a full investigation hearing) and is substantively
justified.
According to the Bill’s proponent, Dr Mapp, New Zealand is one
of only two OECD countries that does not have a probation period for
new employees. He probably shares the views of many employers
that it is difficult to get rid of ‘bad’ employees. Those
groups who are against the Bill say it will make it too easy for employers
to get rid of people for no good reason.
Whatever your view on this proposed legislation, we think one of the
key factors in a successful employment relationship lies in effective
and focussed recruitment. Good decisions at the recruitment stage
should avoid problems appearing in the first 90-days of employment
and beyond.
For more information, please contact:
Erin Davies
Partner
t: +64 9 979 2177
m: +64 29 622 2300
e: Erin Davies
Last updated: 10 August 2006
This article is intended to be brief in nature and should be used for information only. It should not be relied on as legal advice. |
