90-day trials must be retained

Keith Woodroof, The Chamber

90 day trials

Research commissioned by Treasury into experience with the statutory 90-day trial period has been widely reported as not demonstrating growth in employment. The research, conducted by Motu Economic and Public Policy Research, found no statistically significant increase in hiring by employers following the introduction of the 90-day trial periods in 2009. Putting aside the question of whether or not, and to what extent, that reason was ever promoted as the rationale for introducing the 90-day trial, it is very clear to The Chamber that its members staunchly support the ability to utilise such trials in their recruitment processes.

There is little doubt that the 90-day trial has given employers the confidence to engage people who under different circumstances may not have been given a chance. This surely is the real value of the scheme – not whether it has resulted in growth in absolute terms. The urgent and pressing need for workers in the aftermath of the Christchurch earthquakes has tended to distort the beneficial effects of the trial which, in more economically difficult times, will likely assist those at the margins – typically the young, inexperienced or lesser qualified – into employment.

As the Prime Minister said, “you can have a piece of academic research but it's quite different from the small café owner whose money is on the line, who is taking the risks and who actually relies on this kind of policy".

In its 2015 end of year survey, the Employers and Manufacturers Association (Northern) reported on the 90-day trial. It said, “a significant number of employers have used the 90-day trial period (78 per cent). Significantly, 43 per cent said the trial period meant they hired a person which normally they would not have”. There is no reason to believe that the findings based upon the experiences of Auckland employers would be any different to those in Canterbury.

While there are sometimes calls from employers to lengthen the term of the trial period, 90-days is generally considered adequate in the majority of cases. The problem is that 90 days is 90 calendar days, regardless of whether this has provided a real opportunity to assess suitability for employment.

For example, cases are often reported of employees commencing employment but then suffering illness or injury for extended periods – which puts employers in a difficult position. They are obliged to make a call (as to the employee’s suitability for continued employment) on the more limited range of information available as a result of the employee not being able to carry out work for what can sometimes be a significant part of the 90-day period. Similar issues can arise with those employed for only a few days each week. One way or the other, it becomes a gamble. Get the decision wrong and it can result in the loss of a potentially good employee or wasted time and additional, onerous costs when shortcomings become apparent. There is no flexibility – no ability under any circumstances to increase the 90-day period. We would like to see this addressed.

© Canterbury Employers’ Chamber of Commerce
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