Employment Relations (Trial Periods) Amendment Bill

I present to the House a legislative statement on the Employment Relations (Trial Periods) Amendment Bill.

DEPUTY SPEAKER: The legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon BROOKE VAN VELDEN: I move, That the Employment Relations (Trial Periods) Amendment Bill be now read a first time.

The Employment Relations (Trial Periods) Amendment Bill extends the availability of 90-day trials to all employers. It repeals the previous Government’s policy of restricting this availability of trial periods to only small businesses. Currently, only employers with fewer than 20 employees can include a trial period of up to 90 days in their employment agreements. By extending the 90-day trial periods to all businesses, this will make a huge difference to the flexibility of the labour market, because large businesses employ around 72 percent of all employees across New Zealand.

The bill is being debated under urgency because in this Government’s coalition agreement for the first 100 days we want to restore business optimism, scrutiny, certainty, and confidence before Christmas. This Government has inherited a bleak economic outlook thanks to the previous Government’s reckless spending and over-regulation. There is no time to waste in getting labour market settings right to ensure both businesses and workers can keep their heads above water.

The 90-day trial periods were introduced in 2009 for small businesses and were extended to all employers in 2011. Extending the 90-day trials was part of a package of reforms that’s intended to reduce costs, support more effective and efficient processes, and improve workplace productivity and flexibility. In 2019, the previous Labour-led Government restricted the availability of trial periods to smaller employers—those with fewer than 20 employees. This Government has heard the message loud and clear from businesses that they want 90-day trials back, and this is a Government that will deliver.

Whether a business has two or 200 employees, bringing on any employee takes time, it takes money, it takes risk, and it’s in the best interests of both the employer and the employee to have the right fit in the workplace. Getting the wrong person can have a detrimental impact on a business and the whole culture within a workplace. Employers have consistently highlighted that the costs associated with dismissing an employee and the risk of a personal grievance claim can make them reluctant to hire a new staff member. Apart from the costs of the dismissal process, retaining an employee who is a poor fit for a business can have a detrimental effect on the overall workplace as a whole. It will only take one worker who’s got a poor attitude or simply doesn’t have the right skills for the job to perform their duties to take down an otherwise very productive team.

The costs and risks associated with this dismissal process could lead to a labour market with fewer employment opportunities, particularly for those people who are doing their best to get a foot in the door. The costly dismissal processes can also make workplaces less productive. When businesses can only employ a certain number of people at a time because they are resource-constrained, having a worker who is a poor match for the job can mean that more suitable job candidates end up missing out when they could have been in the best interest of that company.

I have heard from businesses time and time again that expanding the availability of the 90-day trials would be one of their top priorities when it comes to lifting unnecessary regulations that they face every day.

This bill will help farmers. Unlike most businesses, farmers don’t just offer prospective employees a job but they ask them to live on the property, because it’s common for farmers to provide on-farm accommodation as part of their employment.

Retailers have said that the 90-day trial has meant that employers have to be prepared to take a risk to bring on new staff members who may not be the best fit, and we need people who are given the opportunity to prove themselves—people who have a chequered employment history or a criminal background may not be given the opportunity because they don’t have that ability for their business owners to take a chance. BusinessNZ identified that reinstating the 90-day trials was an election priority, and the Employment and Manufacturers Association did as well.

This bill is intended to encourage employers to take on new staff by reducing risk in their hiring process. It’s particularly the case when employers are considering employing someone who doesn’t tick all the boxes. They might not have the right skills, they might not have the right experience, but they might have the right attitude, and this is a Government that says we should give them a go.

Workers who are just starting out in their career and they’ve had a break from working or they’re looking for a change will benefit from this bill. Workers that might be considered risky will benefit from this bill.

Starting a business is incredibly brave. Taking on employees is incredibly brave. This bill will provide more flexibility in the labour market, which is good for both employers and employees. I commend this bill to the House.

Wow! Here we are, under urgency, with another week of this Government taking New Zealand backwards, and another bill attacking working people. I note the Minister can’t even speak for her full allocated time, even though we are in urgency and there’s no select committee process, and I have sympathy for the Minister because there is absolutely nothing to back up this policy that she is putting though to extend trial periods. Her own officials, in the regulatory impact statement (RIS)—and I do commend the officials for actually producing one in relation to this bill—say, “What shall we do? Should we extend this? No. We should stick with the status quo.” That’s what it says in the RIS produced by the Minister’s own officials.

So what could the possible reason be for doing this and for extending this policy? Is there evidence that it actually does increase hiring? Is there evidence that it makes it easier for people to actually get work or hire people? No. The evidence says exactly the opposite, and this isn’t my evidence. This isn’t trade union evidence. This is evidence commissioned by Treasury. Treasury says that it doesn’t make a difference, so why are we doing this? The only thing I can come up with is that this Government hates working people; you hate working people.

This is the second bill in two weeks to go under urgency that makes absolutely no difference in benefits to working people. It may have some benefits in the sense of employers not wanting to go through fair processes to actually dismiss employees, which is totally available under New Zealand law. If you have an issue with performance or if you have an issue with conduct, you can go through a fair process and that employee can be dismissed in New Zealand. That can already happen.

So I was interested to read on the cover of The Post this week that the Minister of Finance said that she believes in leadership and that it’s important to take New Zealanders with her, and I ask this Government: which New Zealanders are they taking with them? Not working people, for sure. The first thing they did through urgency was change the Reserve Bank mandate to take the importance off jobs. The next thing they did was repeal fair pay agreements—attacking wages of working people, and conditions. Another thing that they did in their second week in Government: attacking jobs again. This Government is not the Government for working people. It is taking their rights away with every single breath it takes for absolutely no benefit to the economy.

If you look at this research conducted and commissioned by the Treasury, you will see that there is absolutely no benefit, on a macro scale, of this policy to the economy. It doesn’t increase hiring, it doesn’t increase the number of people that are taken on, and it doesn’t make things better for people who are vulnerable. The only thing it does is increase the likelihood of injustice for people who are engaged in work to be dismissed unfairly.

It is a shame and a travesty on this Government that they would, under urgency, decide to bring through a bill to this Parliament that doesn’t help employers—it doesn’t—and it doesn’t help people that are looking for work. It just extends a policy which is shown in evidence not to work.

We’ve heard again and again that this Government, for some reason, doesn’t need to have evidence or arguments to back up this policy, and we’ve seen the Minister not able to articulate that over her full call, because there just isn’t anything to back that up. I would say to the members opposite that electoral mandates do not excuse bad lawmaking. Electoral mandates do not excuse bad lawmaking, and this is bad lawmaking. There is no select committee process. There is no ability for New Zealanders, who have strong feelings about trial periods, to be able to submit to the select committee process and tell you that impact that it would have on their lives.

Actually, I won’t have time to go through it in the first reading, but I have got examples that have been proactively sent to me by members of the public wanting to make a submission on this piece of legislation and not being able to. I’ve examples of people emailing me and saying, “When will the select committee process be, Camilla?”, and I have had to say to them, “Unfortunately, the Government that has been elected has decided that they do not want to hear from you. Your views that you would normally be able to expect in a normal select committee process are not valid.” I think this Government should be ashamed of that because this is a ridiculous, pointless piece of legislation that just makes it more unfair for people.

As we have seen, and as the Minister went through, it was brought in in 2009, when it was 20 employees; in 2011, it was all employees; in 2019, it was back to 20; and in 2023, it is back to all employees. There is no clarity and no purpose for this bad law, and I do not commend it to the House.

The time has come for me to leave the Chair. The House will resume at 2 p.m.

Sitting suspended from 1 p.m. to 2 p.m.

House resumed.