Business lobbyists say 90-day trial period long enough

Friday 16th October 2015

Business lobby leaders are pleased with the way small business owners are using the 90 day trial period, but don't think it needs to be extended.

The MYOB Business Monitor survey of more than 1,000 small-and-medium sized business owners found sourcing staff was the biggest employment issue facing them. About 63 percent of businesses employing six to 19 staff hired someone on a 90 day trial, with 13 percent dismissing a worker within the period, in the year ended Aug. 31. Industry association heads speaking at an event co-hosted by MYOB and the Wellington Chamber of Commerce agreed the trial had been a positive move in helping businesses mitigate the risk of taking on staff, but didn't see the need to extend the period.

"The 90 day trial periods have been very successful - not just for employers, but also employees," Food and Grocery Council chief executive Katherine Rich said. "I think 120 days is unreasonable, mainly because I would ask the question 'if you don't know after 90 days, what more information are you getting after 120?"

SME Business Network founder Tenby Powell shared Rich's sentiments over the programme's success, as did Wellington Chamber of Commerce chief executive John Milford, saying management and staff should be engaged throughout the entire trial period, and that the outcome "should never come as a surprise."

Hospitality Association head Bruce Robertson said his members "love 90 days", but saw a case to allow for an extension by mutual agreement.

A Ministry of Business, Innovation and Employment survey released last year showed 59 percent of respondents had hired staff on the basis of the 90 day trial, which was introduced for businesses with fewer than 20 staff in 2009, and later extended to all employers in 2011 despite union opposition.

While the 90 day trial period was viewed favourably by small employers, the use of zero hour contracts, where casual workers aren't allocated any guaranteed hours, was not, with just 15 percent of respondents saying they would use them.

FCG's Rich said zero hour contracts didn't reflect the working relationships in small business environments which were often "quite intimate," and that while casual labour was often needed, there has to be a discussion between staff and management.

The Hospitality Association's Robertson said there was sometimes a blurring of permanent part-time and casual work which created misunderstandings between staff and employers, and that businesses needed to better understand their labour needs to give everyone more certainty.

BusinessDesk.co.nz

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