The new National - ACT - NZ First coalition government has re-introduced 90-day trials in one of its first acts in a concerted campaign to attack worker rights and tilt the industrial relations playing field further in favour of employers. But despite the dangers of 90-day trials which give employers the ability to fire workers for no reason, there are still some important ways that we can protect ourselves - most importantly by joining a union and being covered by collective agreements.
The New Government’s Anti-Worker Agenda
From December 2023, all employers in New Zealand have access to 90-day trials - giving them the right to fire workers employed on a trial basis at will, with no reason required and no legal recourse for workers to take personal grievances for wrongful dismissal. The former Labour government had limited 90-day trials, which were brought in by the previous National government, to businesses that employed 19 or fewer employees. Now those restrictions have been removed in a coalition agreement between the National and ACT parties, which re-introduces the trials for all businesses as part of a much wider business offensive against the interests and rights of New Zealand workers.
“Together with the rollback of Fair Pay Agreements, and risks to reforms to contracting, there is a compelling case that this reform is simply designed to create a more insecure, compliant, and less well-organised workforce.” NZ Council of Trade Unions President Richard Wagstaff. (1)
The law change was rushed through under urgency by the new government on the 21st December 2023, without the possibility of select committee scrutiny and with no public consultation. While Workplace Relations and Safety Minister Brooke van Velden from the extremist ACT party argued that 90-day trials would “enable more New Zealanders to find fulfilling work." and would “encourage businesses to hire people they otherwise might not”, the research clearly says otherwise. Research from Motu in 2016, who were commissioned by Treasury, found "no evidence that the ability to use trial periods significantly increases firms' overall hiring", and "no evidence that the policy increased the probability that a new hire by a firm was a disadvantaged jobseeker". (2)
In fact, as the NZ Council of Trade Unions (CTU) point out, what the research did find was that “the only quantifiable impact of 90-day trials is a reduction in dismissal costs for employers.” The CTU argue that reinstating 90-day trials for all businesses will only serve to diminish workers’ job security and their ability to negotiate fair wages. This will have particularly negative impacts on disadvantaged groups of workers, such as Māori, Pasifika, disabled workers, women and gender diverse workers, who already experience low rates of job security and are vulnerable to discrimination. For example, members of the disability community have experienced the use of 90-day trials as legal cover to dismiss a person based on their ‘fit’ for the organisation, instead of the organisation making reasonable adjustments required under the Human Rights Act 1993. (3)
Unite National Secretary John Crocker said the policy would disproportionately impact workers that were young and on low incomes.
“This policy would disadvantage vulnerable workers, like young people or those just entering the workforce, while allowing bad employers to fire people with impunity. Workers can already be fired – but it has to be done fairly and reasonably. [90-Day trials will] protect unfair and unreasonable employers from any consequences.” (4)
Union Negotiated Collective Agreements are the Best Defence
Not all workers can be employed under a 90-day trial. No worker who has already been employed by a business can be put on a trial, and any new employment agreements must have the conditions of the trials clearly laid out. But crucially, workers covered by union negotiated Collective Agreements (CAs) will not be affected as a 90-day trial would be inconsistent with the CA and therefore invalid.
So if you gain employment at a worksite with a CA, join your union and protect yourself from unfair dismissal.
If a worker has already signed an individual employment agreement (IEA) and then joins the union, the union’s CA will invalidate any 90-day trial provisions, giving them full protection. So it’s incredibly important for new employees at sites with CAs to be informed about them and given the opportunity to join a union as soon as possible. Unite union organisers and delegates will be busy this year ensuring that all our CA sites provide safeguards against unfair dismissal for anyone who joins the union.
Advice for Workers on Individual Agreements
Even if a worksite does not have a CA, which is common in many hospitality businesses such as cafes, restaurants and bars, there are still some protections for new workers. There are many possible mistakes an employer might make when signing a new worker up to a 90-day trial, or firing someone already on one, that may invalidate the trial, opening the employer up to wrongful dismissal processes. As pointed out by law firm HeskethHenry in their advice for employers regarding the trials, “The Employment Relations Authority and Employment Court take a very strict approach when determining whether employers have complied with the legal requirements for trial periods. 133 out of 178 trial provision dismissals (approximately 75 percent) considered by the Authority between 2015 and 2023 failed to be upheld.” (5)
Unions can advise members about whether or not the 90-day trial clauses in their individual employment agreements (IAs) are legally binding, and whether or not being dismissed under a 90-day trial is grounds for taking legal action or a personal grievance for wrongful dismissal. Successful personal grievances can result in significant payouts for affected workers.
Furthermore, Employment NZ stress that “There are a number of ‘must-dos’ in any employment relationship. The extension of 90-day trials will not affect other aspects of employment relations, such as the requirement to act in good faith, or worker protections regarding pay, conditions, leave, and health and safety.” (6)
Even if an employee is on a trial period, they can still bring a personal grievance on grounds other than about their dismissal, for example:
discrimination
sexual or racial harassment
pressure about union membership
continuity of employment under Part 6A of the Employment Relations Act 2000
if the employer does something that unjustifiably disadvantages them
And if they have been dismissed, they may still have ground for an unjustified dismissal claim if:
if the employee starts working before the contract is signed
if the employment contract does not mention that there is a trial period, or
the employment contract does not contain a notice period in case of dismissal or resignation. (7)
Unions can offer expert advice on what constitutes “good faith”, and whether or not these other avenues for personal grievances may be able to be pursued. So if you are a new employee on a 90-day trial, even at a non-CA site, join your union for the best protection during this very vulnerable early period of your employment.
There are plenty of cowboy employers out there, don’t let yourself be taken for a ride. Join Unite union now!
(5) Employment News from HeskethHenry, Jan 19 2024
(7) https://www.employment.govt.nz/starting-employment/trial-and-probationary-periods/trial-periods/