Wilkinson Kate: Employment Relations Amendment Bill — First Reading Second Reading 
Wilkinson Kate: Employment Relations Amendment Bill — First Reading Second Reading 
[Volume:651;Page:318] 
Hon KATE WILKINSON (Minister of Labour) 
: 
 I move  
That the Employment Relations Amendment Bill be now read a first time. 
 This bill amends the Employment Relations Act 2000 to implement trial employment periods for new employees of small and medium-sized businesses—those employing fewer than 20 employees—and to support Government policy on KiwiSaver which is being enacted through amendments to the KiwiSaver Act 2006 by repealing those provisions of the Employment Relations Act that deal with KiwiSaver.  
We are committed to getting New Zealanders into jobs and providing the right encouragement to employers to employ them. This is important in the current challenging economic times. Given the pressures that employers and employees at small and medium sized businesses are under the Government believes that it is important that the measures contained in this bill are acted on quickly. This bill will increase the willingness of employers to take on new staff. Greater flexibility for employers will provide much-needed assistance. The Government’s policies on both KiwiSaver and the 90-day trial periods were well signalled prior to the election.  
Firstly the Government is making changes to the KiwiSaver scheme through the omnibus tax bill. One of these changes will require employer contributions to KiwiSaver to be on top of an employee’s existing pay when the employee joins a KiwiSaver scheme. This change will safeguard the ability of employers and employees to negotiate in good faith changes to this arrangement. There will therefore no longer be a need for similar KiwiSaver discrimination provisions contained in the Employment Relations Act.  
Secondly this bill provides for trial periods of up to 90 days for new employees who want to be given a go and who want the opportunity to get their feet in the employment door to back themselves to say “Give me a go and I will prove how good I am.” There are no provisions for trial periods in our existing employment legislation. In fact we are one of the few countries internationally that do not have a trial period for employees. This bill will enable employees in small to medium sized enterprises—those with fewer than 20 employees—to determine a prospective employee’s suitability for permanent employment without the risk of legal proceedings for unjustified dismissal in the event that the employment relationship does not work out. It will encourage small businesses to give a new employee a go and to take on new employees.  
Accordingly under this bill a new employee who agrees to a trial period of up to 90 days will be unable to raise a personal grievance for reasons of unjustified dismissal. The introduction of the proposed 90-day trial period will encourage more small and medium sized businesses—which can find it difficult to absorb costs associated with giving new employees a go—to take on new employees. This will benefit many people at the margins of the labour market.  
This bill is not about taking away rights; it is about giving opportunities. It has safety mechanisms to ensure that it is fair and balanced and is win-win for both employee and employer.  
The bill will amend the Employment Relations Act so that an employer with fewer than 20 employees may agree in good faith with a new employee to a trial period of up to 90 calendar days as part of a written employment agreement signed by both parties at the beginning of the employment relationship. The trial period will be entered into only by agreement. No one is being forced into a trial period. No existing employees can be put on to a trial period; it is an option that will be available to employees wanting to be given an opportunity to work in small and medium sized businesses.  
Thirdly it is very specific in that it relates only to the ability to take a personal grievance for unjustified dismissal in the first 90 days of an agreed trial period. Other rights are specifically retained so that employees still have the same protections under the Act for unjustifiable action by the employer whether or not they have agreed to a trial period: the same protections against discrimination and the same protections against sexual and racial harassment and duress. These protections still remain.  
The bill preserves the right of an employee to raise a personal grievance under the discrimination provisions of the Employment Relations Act. The bill also ensures that an employer and an employee may agree to a trial period only once. So if the employment relationship ends and the employee is subsequently re-employed the option of a trial period will not be available. That means that the trial period cannot be used as for example an 89-day rollover. In other words the employer under this bill can employ an employee with a trial period only if that employee has not previously been employed by that employer.  
The bill also specifically ensures that an employee whose employment agreement contains a trial provision is in all other respects including access to mediation and including being subject to good-faith provisions to be treated no differently from an employee whose employment agreement contains no trial provision or contains a trial provision that has ceased to have effect. Mediation will be available; good-faith provisions will continue to apply.  
Finally we have stated that beneficiaries who agree to a trial period and who find that the trial just does not work out for them may then be able to return to the benefit without having to wait the stand-down period. That will give beneficiaries the confidence to step on to that employment ladder knowing that if it does not work out through no fault of their own they can fall back on the safety net of the benefit.  
This bill responds to the needs of employers in uncertain times whilst safeguarding the basic rights of employees. It is in step with international employment law and it is a simple and common-sense response to the needs of New Zealanders. The Small Business Advisory Group report in 2003-04 has as its first and foremost recommendation a trial period for new employees.  
This bill has already been extensively debated and it was consulted on a couple of years ago when there were 618 submissions to Dr Mapp’s member’s bill. This bill before the House addresses the concerns expressed during that consultation. The bill will give businesses the confidence to take on new staff and it will give new employees the opportunities to get on the employment ladder. It will provide opportunities for those who might suffer disadvantage in the labour market—for example employees who are new to the workforce or returning to the workforce after some time away or specific groups at risk of negative employment outcomes. I commend this bill to the House.