Carol Beaumont, opinion piece in DominionPost, published 22 June 2006

Carol Beaumont, opinion piece in DominionPost, published 22 June 2006

The National Party’s Employment Relations (Probationary Employment) Amendment Bill attacks the rights of every employee in New Zealand. It is unnecessary and unfair. But most importantly, as New Zealand strives to become a high skill, high value economy, it is unproductive.

A change in employment law is unnecessary
National’s bill is not needed to allow probationary employment – current law already does that. Instead, the Bill simply takes rights from employees and gives them to employers. At present probation must follow certain rules. In contrast National’s bill throws out these rules – for 90 days it’s anything goes.

It is misplaced to claim we’re out of kilter with the OECD because we don’t have a length for probation set in law. The real issue is not how long probation lasts, but what rights an employee must forfeit. For example, the maximum probation period in Germany is six months, but the only right to change is the minimum notice period - dropping from four weeks to two.

In contrast, the loss of rights under National’s bill would be huge. The best comparison might be the US where studies suggest as many as 200,000 employees each year are sacked where they would have grounds for wrongful dismissal.

Or take the example of Mary Parsons –ex-employee of the US Bolton Plating Company. She was concerned about acid eating through her work gloves and raised the issue with her supervisor - but they did nothing. So she took it up with health and safety officials – they upheld her complaint. Unfortunately Mary was still in the probationary period of her new job – so the company sacked her.

Or the security guard in Australia sacked on the last day of his 3 month probation for refusing to sign a ‘take it or leave it’ individual contract that would have cut his pay by almost $9,000.

The loss of rights is unfair
National claim their bill reduces the employers’ “risk” of expensive personal grievance procedures. Even if the claims about this risk stood up, and anecdotal evidence about the number cases brought before the Employment Relations Authority in the first three months suggest it doesn’t, it still wouldn’t mean the answer was attacking everyone’s rights.

With almost two million New Zealanders in the workforce, Statistics New Zealand says 17 per cent change job every quarter. On average, every worker changes jobs six times in their lifetime. On this basis National’s bill would mean 297,000 workers without any rights at any one time. Over our careers all of us would face a year and a half without any rights either.

Despite this indiscriminate attack, National perversely claims their bill helps groups over-represented in our unemployment statistics. Those “too old, too young, or too brown,” to use Don Brash’s infamous phrase, will get more work, say National because employers will face “less risk” giving them a job.

Anywhere else, this sort of discrimination would be decried. But in National’s world of work employer prejudice is celebrated and rewarded.

The risks don’t just fall on employers. Workers invest time, energy, and skills in a new job. At the same time they must fit in with other workers, new working hours, travel and workplace culture – there’s a lot of pressure. And given it’s their livelihood - there’s a lot at stake. Is that really the time to be reducing their rights?

There are also flow-on effects from dismissals under this Bill. Whether it was fair or not, dismissal could stop a sacked employee claiming a benefit without a three-month stand down. Equally they might have to declare the dismissal when applying for their next job – irrespective of its justness.

And spare a thought for seasonal workers – a series of short intermittent contracts might mean they never have employment rights again.

It is naïve to think there aren’t unscrupulous bosses out there who will use this bill to create a “disposable” workforce on rolling 89-day contracts. At a time when workplace skills are a key labour market issue, the incentive that the bill gives is completely counterproductive. 

Attacking rights to increase profitability is unproductive
Workplace productivity and the drive for a high skill, high value economy are vital economic issues – this contrary view of employment relations only threatens to poison positive attitudes in the workplace that have developed under the Employment Relations Act.

A lack of security breeds mistrust. Any worker in their first 90 days will know that any query they raise could result in dismissal. The risk of no job security for 90 days changing jobs will also prove a huge dampener on labour mobility.

As New Zealand pursues economic transformation, this bill undervalues the contribution of workers. Instead it panders to those employers who see labour as just another commodity.

Since the Employment Relations Act came into effect in 2000, New Zealand has enjoyed some of the strongest economic growth and the lowest unemployment rates in the OECD. Despite National’s concerns, the World Bank ranks New Zealand the easiest country in which to do business.

There is a better way to assist those remaining unemployed who find it hard to break into decent work. It is through investment in skills and innovative schemes that directly address any disadvantage. There is also a need to recognise that some workers are currently overrepresented in the unemployment statistics for example Maori, Pacific and young workers.  There are several very successful schemes already. Improving these schemes, or scaling them up, is a much better approach than taking employment rights away from every worker.