Dr Stephen Blumenfeld, director of the Centre for Labour, Employment and Work, has contributed to a discussion over the efficacy of New Zealand’s 90-day trial period legislation.

Dr Stephen Blumenfeld, Director of the Centre for Labour, Employment and Work, has contributed to a discussion over the efficacy of New Zealand’s 90-day trial period legislation.

The government's claim that the 90-day trial period for workers was boosting employment has been called into question by recently published research.

A report commissioned by Treasury said 90-day trials had not significantly stimulated employment or helped struggling job-seekers. The trial period, which came into force for small firms in 2009, allows employers to fire new staff within the first 90 days, without giving a reason and without facing legal action for unfair dismissal.

The government had argued the system would create more jobs by encouraging businesses to take a chance on new employees who otherwise may not have been taken on.

However, the Treasury report found no evidence that hiring had significantly increased because of the policy and no evidence that firms were more likely to employ disadvantaged job seekers, such as recent immigrants or people under 25.

Dr Blumenfeld noted that the policy was intended to encourage employers to take on more disadvantaged job-seekers, including young people, new migrants and Māori and Pacific people.

"This research indicates that in fact it hasn't really benefited them. It hasn't hurt them, but it hasn't had any effect on their employment."

He said the research, for which hard data was used was "more objective" than previous government studies, which relied on anecdotal evidence and surveys of employers.

The government extended the policy to all companies in 2011 and the Labour Minister at the time, Kate Wilkinson, talked up its success, citing an independent report which suggested the policy was responsible for about 13,000 new jobs, as well as anecdotal evidence from employers who say they wouldn't have taken on a particular person had it not been for the trial period.

Dr Blumenfeld also cited his research conducted as part of a MBIE-funded series of studies on precarious and insecure work in conjunction with Professor Phil Morrison from Victoria University’s Geography Department and other New Zealand-based researchers, which found that those employed under 90-day trials were also less likely to get employer-funded training in that time than people who went straight into permanent positions.

Previous studies had also shown union members were less likely to be hired under trial periods, and the concern was that people who joined a union or opted for a collective contract could be dismissed, he said.

Link to RNZ National story: Employee trial period a failure - report

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