In the dynamic world of New Zealand employment, the 90-day trial period has been a hot topic, experiencing shifts and changes that have both raised eyebrows and sparked debates. Back in 2018, Prime Minister Jacinda Ardern and Workplace Relations Minister Iain Lees-Galloway announced a rollback, waving goodbye to the controversial 90-day trial periods for businesses with over 19 employees. The government of the day argued that the rollback was a move to restore balance, tipping the scales back towards fair working conditions for the everyday Kiwi worker. It wasn’t just about saying goodbye to trial periods; it was also a nod to restoring employee rights for rest and meal breaks – a little more breathing room for the workforce.
Fast forward to today, where the newly elected government has decided to shake things up once again, working towards expanding the 90-day trial periods to be available to all employers, big or small.
The rationale? To boost business confidence, increase workplace flexibility, and essentially make the hiring game a tad less daunting for everyone involved.
Heres is our take on the pros and cons for each group.
Advantages and Disadvantages: A Two-Sided Coin
Now, you might be wondering, what’s the big deal? Well, the 90-day trial period dance isn’t just about employers testing the waters; it’s a delicate balancing act. Let’s break it down:
Advantages for Employers:
- Risk Mitigation: Employers can assess potential hires without a long-term commitment, minimizing the risk of hiring the wrong person.
- Flexibility: The trial period provides room for adaptability to changing business needs and economic conditions.
- Cost Savings: Swift decisions during the trial period can result in cost savings for businesses.
Disadvantages for Employers:
- Impact on Morale & Culture: Frequent use of trial periods – if this is the case – can negatively affect employee morale and overall workplace culture.
- Tentativeness from new employees – in the short term: In some cases, some employees will come in with a defensive mindset; they’ll ‘play it safe’ – to mitigate the risk. As a result, in some situations employers don’t get a strong gauge of fit or future potential.
As an example, we recently saw a strongly worded email sent to an employer’s senior management, just after the end of their trial period, with a raft of criticism, ending along the lines of, ‘I’ve just finished my trial period, so I’m safe’…..
Advantages for Candidates:
- Opportunity for Assessment: Candidates have a chance to evaluate the company culture and job fit during the trial period.
- Notice period during the trial period: Often the new employees notice period in shortened during the trial period; should they be approached with a better offer, or they aren’t happy with what they have experienced in their new workplace, then they can move on with less pain.
- There should be greater willingness to employ new staff: with the extension of this law, it gives business leaders the protection to take more risks; in theory, we should see more jobs be offered (at a total nationwide level).
Disadvantages for Candidates:
- Job Insecurity during this period: The uncertainty of a trial period may create anxiety for candidates, affecting job satisfaction and performance.
- Limited Rights during this period: Candidates during the trial period may have limited legal rights compared to those with permanent positions.
As we navigate these twists and turns in New Zealand’s employment laws, it’s evident that finding the sweet spot between employer flexibility and employee protection is no walk in the park. The 90-day trial period saga is a reminder that the employment landscape is ever-evolving, and the dialogue between policymakers, businesses, and workers is the compass guiding us toward a fair and effective framework for everyone involved. So, buckle up, New Zealand, the employment ride continues!
If you’d like to discuss this, or get some advice, the team and I are always here to help. Good luck!
Talent Acquisition Lead
DDI: 09 200 3121