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Employment Relations Amendment Bill (no.2) - Submission to the Transport and Industrial Relations Select Committee [2010] NZHRCSub 5 (13 September 2010)

Last Updated: 26 May 2015

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Submission by the
Human Rights Commission

EMPLOYMENT RELATIONS AMENDMENT BILL (No 2)

To the Transport and Industrial Relations Select Committee

13 September 2010

Contact person:
Sue O’ Shea

Principal Advisor EEO
Phone 04 -496 9774

New Zealand Human Rights Commission
Employment Relations Amendment Bill (No 2)


Table of Contents

  1. Executive summary 1

  1. Introduction 2

  1. Rights at work in international human rights law 5

  1. International guidance 8

  1. Trial periods 9

  1. Dismissal without redress 10

  1. Equal employment opportunities implications 15

  1. Constrained consent 20

  1. Decent work 21

  1. Union access 22

  1. Conclusion 24








  1. EXECUTIVE SUMMARY

1.1 The Commission strongly opposes the Bill in regard to the 90 day trial period and union access to workplaces because these provisions fundamentally abrogate human rights and diminish equal employment opportunities.

1.2 For the reasons outlined in this submission, the Commission considers these aspects of the Bill do not comply with New Zealand’s commitments to international human rights law. They are also retrogressive and are therefore at odds with the principle of progressive realisation of economic, social and cultural rights as outlined in Article 2 (1) of the International Covenant on Economic, Social and Cultural Rights. The proposals also undermine the right to work for some vulnerable groups.

1.3 The Commission considers that the changes cannot be justified. They are likely to have an ongoing and detrimental effect on equal employment opportunities and the protection of rights at work.

1.4 Specifically, the 90 day trial period:

1.5 Limiting union access to workplaces is inconsistent with New Zealand’s long standing bi-partisan commitment to the progressive realisation of human rights and international labour standards.

  1. INTRODUCTION

2.1 This submission on the Employment Relations Amendment Bill (No 2) is made by the Human Rights Commission. The Commission is an independent Crown Entity that derives its statutory mandate from the Human Rights Act 1993 (the Act).

2.2 The long title to the Act states it is intended to provide better protection of human rights in New Zealand in general accordance with United Nations Covenants and Conventions of Human Rights. The Commission has two primary functions including advocating and promoting “respect for and an understanding and appreciation of human rights in New Zealand society”.[1] It also administers a disputes resolution process for complaints about alleged discrimination[2] and deals with a significant number of broader human rights complaints.

2.3 To give effect to the primary functions, the Commission can report on the implications of any proposed legislation that it considers may affect human rights[3] and make public statements on any matter affecting human rights ... including compliance with the New Zealand Bill of Rights Act 1990.[4]

2.4 The Equal Employment Opportunities Commissioner is required to evaluate the role that legislation plays in facilitating and promoting best practice in equal employment opportunities.[5]

2.5 In the area of employment, the Commission responds to a significant number of complaints and enquiries, and provides advice and guidance on being a good employer. In the 2009 -2010 financial year pre-employment issues accounted for 11 per cent of complaints and inquiries, the fourth most common area of complaint/inquiry. The most common area was employment issues which accounted for 32 per cent complaints and inquiries.[6]

2.6 In response to frequent requests for information about how to avoid discriminatory hiring practices, the Commission published “Getting a job An A-Z for employers and employees Pre-employment guidelines.” Demand for this booklet has been high, signalling a need for this information. The booklet is now in its fourth reprint, and since its publication in 2008 12,000 copies have been distributed.

2.7 The Commission also provides advice on being a good employer and equal employment opportunities including on-line resources on the NEON website, www.neon.org.nz which is co-hosted with the EEO Trust. The Commission also monitors EEO reporting in the wider state sector.


2.8 The Commission recently completed the National Conversation about Work, which is the largest work-based project undertaken by the Commission. The regional reports and summary report represent the views of more that 3000 New Zealanders working in a variety of industry sectors throughout the 16 regions of the country. It also gave the Commission comprehensive qualitative data which enables the Commission to be informed and authoritative about issues of fairness in the workplace.

2.9 The National Conversation about Work highlighted the centrality of work in the lives of New Zealanders, whether they are currently in the labour market or seeking employment. The Commission observed that many workplaces have cultures based on trust, engagement and performance. There was a genuine acceptance by both employers and employees that decent work underpinned a fair society.

2.10 Specific attention was paid during the project to disadvantaged groups in the labour market, particularly in rural and provincial areas, and their issues relating to the right to work. These are the very people identified in the Explanatory Note to the Employment Relations Amendment Bill (No 2) which states “the policy intention” will “encourage employers to take on new staff, particularly from groups that face higher levels of labour market disadvantage.”

2.11 This submission focuses on the human rights and equal employment opportunities implications of two primary issues: the 90 day trial period and union access to work-places.

3. RIGHTS AT WORK IN INTERNATIONAL HUMAN RIGHTS LAW

3.1 The right to work is found in Article 23 of the Universal Declaration of Human Rights.[7] Art.23 (1) and (4) are pertinent to the proposed legislation. Art.23 (1) states: “Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment.” Art.23 (4) states: “Everyone has the right to form and to join trade unions for the protection of his interests.”

3.2 Art.22 of the International Covenant on Civil and Political Rights[8] reiterates the right to form and join trade unions. Art.22 (1) says that no restrictions may be placed on the exercise of this right other than those which are prescribed by law and which are necessary in a democratic society in the interests of national security or public safety, public order, the protection of public health or morals or the protection of the rights and freedoms of others. Art 22 (3) refers to state parties’ obligations to not pass legislative measures that prejudice guarantees provided in the International Labour Organisation (ILO) convention concerning Freedom of Association and the Right to Organise.

3.3 The International Covenant on Economic, Social and Cultural Rights[9] is the most comprehensive of the international instruments in dealing with the right to work. It includes a number of articles on rights at work, particularly article 6, 7 and 8. Art.6 repeats the right to work: “which includes the right of everyone to the opportunity to gain his living by work which he freely chooses and accepts, and will take appropriate steps to safeguard this right. The steps to be taken ... to achieve the full realization of this right shall include ... policies and techniques to achieve steady economic, social and cultural development and full and productive employment under conditions safeguarding fundamental political and economic freedoms to the individual.”

3.4 Art.7 reiterates the right of everyone to the enjoyment of fair and favourable conditions of work. Fair and favourable conditions include, for example:

3.5 Art.8 relates to the right to form and join trade unions. Art.8 (1) (b) sets out the right of trade unions to function freely subject to no limitations other than those prescribed by law and which are necessary in a democratic society in the interests of national security or public order or for the protection of the rights and freedoms of others.

3.6 The United Nations Committee on Economic, Social and Cultural Rights provides a general comment[10] on the application of ICESCR Article 6 regarding the right to work. The Committee says: The right to work, as guaranteed in the ICESCR affirms the obligation of States parties to assure individuals their right to freely chosen or accepted work, including the right not to be deprived of work unfairly.[11]

3.7 The Committee also comments on the importance of trade unions in realising rights at work, saying “States parties should respect and protect the work of human rights defenders and other members of civil society, in particular the trade unions, who assist disadvantaged and marginalized individuals and groups in the realization of their right to work.”[12] It also advises “the role of trade unions is fundamental and will continue to be considered by the Committee in its consideration of the reports of States parties.”[13]

3.8 There are also a large number of core labour standards that relate to fundamental principles and rights at work embodied in eight core ILO Conventions. New Zealand has ratified six of these[14]and considers that its law and practice substantially comply with the principles that underlie the other two Conventions[15].

3.9 New Zealand is a strong supporter of the ILO’s efforts to promote core labour standards and voted for the 1998 ILO Declaration on Fundamental Principles and Rights at Work. This places an obligation on the ILO’s 181 member States to protect, promote and realise in good faith the principles and rights inherent in the fundamental Conventions, even if members have not ratified all of them.[16]

3.10 Countries who are members of the ILO are assumed to be bound by the core conventions whether or not they have ratified them.

3.11 Successive governments have supported the Decent Work objectives of the ILO, which align with New Zealand’s Decent Work Vision.[17] One of the key objectives of the decent work agenda is the promotion and realisation of standards and fundamental principles and rights at work.

3.12 Critical success factors identified by government, employers and workers include:

3.13 Prior to the recession, there had been progressive realisation of the decent work agenda, with the passage of employment legislation such as Paid Parental Leave and Employment Protection Act, Flexible Working Arrangements Amendment Act, Employment Relations (Rest Breaks, Infant Feeding and Other Matters) Amendment Act and increased annual leave entitlements.

  1. INTERNATIONAL GUIDANCE

4.1 As with all the substantive social and economic rights, the right to just and favourable conditions at work is subject to progressive realisation (that is, States can implement the right incrementally over time, depending on the availability of resources).[18] Some of the obligations imposed by the International Covenant on Economic, Social and Cultural Rights, (ICESCR) must be recognised immediately – namely, the rights must be exercised without discrimination of any kind.

4.2 Progressive realisation as provided in Article 2 (1) of the ICESCR requires States parties to take steps towards the full realisation of Article 6: “Such steps must be deliberate, concrete and targeted towards the full realization of the right to work.”[19] States parties “have a specific and continuing obligation “to move as expeditiously as possible towards the full realization of Article 6”.[20]

4.3 The General comment (No 18) on the Right to Work from the UN Committee on Economic, Social and Cultural Rights also provides guidance on regression: “As with all other rights in the Covenant, there is a strong presumption that retrogressive measures taken in relation to the right to work are not permissible. Such retrogressive measures include, inter alia, denial of access to employment to particular individuals or groups, whether such discrimination is based on legislation or practice, abrogation or suspension of the legislation necessary for the exercise of the right to work or the adoption of laws or policies that are manifestly incompatible with international legal obligations relating to the right to work. An example would be the institution of forced labour or the abrogation of legislation protecting the employee against unlawful dismissal. Such measures would constitute a violation of States parties’ obligation to respect the right to work”.[21]

4.4 The Committee also comments that “specific measures to increase the flexibility of labour markets must not render work less stable or reduce the social protection of the worker.”[22]

4.5 This principle was affirmed by G20 leaders in September 2009 who made a commitment to maintaining labour standards during the recovery from the global economic crisis, saying: “We agree that the current challenges do not provide an excuse to disregard or weaken internationally recognized labour standards. To assure that global growth is broadly beneficial, we should implement policies consistent with ILO fundamental principles and rights at work.”[23]

  1. TRIAL PERIODS

5.1 The Bill provides that any employer may enter into an employment agreement that contains a trial period. The current position is that only employers who employ fewer than twenty employees can enter into such agreements.

5.2 In order to assess the likely impact of the Bill, it is important to look at the statistics on the number and proportion of the workforce that potentially fall under its protections. Statistics provided by the Department of Labour state that in the June 2009 quarter, there were 1,797,600 total filled jobs in the labour market and the worker turnover rate was 15.8 per cent. Thus, workers moved into and out of about 284,000 positions during the quarter. From June 2007 to June 2009, about 15 per cent – 19 per cent of all jobs saw workers moving into and out of them. About 17 per cent of workers (310,000) had started their job within the last three months in the 2008 tax year. Therefore, the proposed amendment has the potential to impact on a large number of people, as many as 300,000 at any one time. In one year, it is estimated that 700,000 people changed jobs.

  1. DISMISSAL WITHOUT REDRESS

6.1 It is unusual for Parliament to take away rights, particularly such a fundamental right as the right of access to a hearing. Denial of redress in this manner in something so central to the everyday life of the vast majority of New Zealanders as employment has profound human rights implications and is a retrogressive measure.

6.2 Recognition of the right for procedural fairness when dismissing an employee took a long-time to develop. The recognition of that right by Parliament and by the courts and its further expansion by the Employment Contracts Act should not be lightly swept aside given the paucity of evidence to support the proposal.

6.3 The parliamentary debates on the Employment Contracts Act are instructive here. When introducing the Bill the Minister, the Hon. Bill Birch, said: “The National Opposition was extremely critical of the 1987 legislation in that, in general, only persons who belonged to unions had access the personal grievance procedures. This Government wants to change that ... a greater range of employees will now have access to personal grievance procedures. The Bill extends access to all employees covered by collective contracts and to employees whose individual contracts provides for grievance procedures.”[24] At the second reading the Minister said: “The new framework will be more democratic and more accessible than in the past. Furthermore, those bodies (an Employment Tribunal and Employment Court) will be accessible to all employees. Employees will no longer have to belong to a union to pursue a personal grievance.” The Minister also said that Bill made “statutory minimum protections available now to all employees.”[25] At the time the extension of procedural fairness to all workers, whether or not they were covered by the union or not, was regarded as a significant advance in employment protection.

6.4 Alone among a number of comparable countries, New Zealand does not allow workers to sue in civil courts for wrongful dismissal (breach of contract.)[26]

6.5 In the first Employment Court case on the 90 day trial period, Chief Judge Colgan stated: “Sections 67A and 67B (of the Employment Relations Act 2000 relating to those with less than 20 employees) remove long standing employee protections and access to dispute resolution and to justice.”[27]

6.6 The Department of Labour’s evaluation of the trial periods assumes that under the trial period an employee could be dismissed without giving reasons: “Aspects that were more widely known were that the trial period was intended for the employer to assess the employee’s suitability for the job, and that the employer could dismiss the employee without notice or reason but could not be accused of unfair dismissal.”[28]

6.7 Employees interviewed for the evaluation who had been dismissed “felt that they had been disadvantaged by being on the trial period and treated unfairly by the employer, either because they had not been given a reason or an explanation for the dismissal, or because they had been dismissed even though, in their opinion, they were performing better than other employees who were not on a trial period and thus could not be dismissed so easily.”[29]

6.8 A complainant to the Human Rights Commission said that she had been dismissed without warning and had no knowledge that there were any problems prior to dismissal. Another thought that she was fired during the trial period because she questioned some work practices of other staff.

6.9 Recent case law has established that dismissed employees can ask for an explanation and employers are obliged to provide a reason. Chief Judge Colgan stated: “I consider that an employer, upon giving notice of termination of an employment relationship, in reliance of s67B is not entitled in law to refuse to give an explanation for such a significant decision. Nor is the employer entitled to give an explanation that is misleading or deceptive or that may tend to mislead or deceive the employee.”[30]

6.10 While acknowledging this useful clarification, the Commission has concerns that given current labour market conditions workers may not realise they have the right to ask for an explanation, or may not feel able to exercise that right. Receiving an explanation without the legal right to respond is fundamentally unfair. The account of the dismissal of Ms Smith by Stokes Valley Pharmacy in Chief Judge Colgan’s judgment states: “When Ms Smith asked what she had done wrong, she says their response was that she was not what they were looking for and that she was inexperienced. They (the employers) say they were unresponsive to Ms Smith’s requests because they had been told they were entitled to refuse to provide reasons or other explanations.”[31]

6.11 Nor does the 90 day trial period oblige an employer to undertake other well recognised elements of fair process, such as:

There is no opportunity to improve or to contest the case.

6.12 BurgerFuel has decided to cease using the 90 day trial period provisions and instead use probationary period processes. The decision was the result of discussions with the union, Unite. BurgerFuel’s Chief Executive said: “From our point of view we need the ability to have people on the probationary period, but we’re also happy to say it’s fair that they get a reason and an explanation if there was a termination.”[33]

6.13 The provisions of the 90 day trial period are retrogressive and hark back to “the common law master-servant relationship, (in which) procedural fairness was not a prerequisite of a valid dismissal. All the law required was reasonable notice or wages in lieu.”[34] This changed in 1973 and employees subsequently “enjoyed statutory protection against unjustifiable dismissal (dismissal without cause or procedural fairness)”[35]

6.14 To use the language of the New Zealand Bill of Rights Act, rights and freedoms should only be subject to such reasonable limits that can be demonstrably justified in a free and democratic society. The proposal does not meet this test as there is insufficient evidence to demonstrably justify the measure.

6.15 The Department of Labour in both the Regulatory Impact Statement (RIS) and in a paper prepared for the Minister of Labour comment on the lack of evidence and limited opportunity for thorough analysis. The Department reported that” “overall, the research suggests that there is an insufficient comparative analysis to properly explore the efficiency or fairness of the system[36] and “the analysis of the policy options under consideration in respect of Part 9 (the personal grievance system) and communications during collective bargaining have been constrained by the limited timeframe in which these proposals have been developed.”[37]

6.16 The summary of findings on personal grievance provisions pointed out that mythology based on anecdote fuelled misunderstanding and “uninformed perceptions” of the personal grievance system and noted that “more could be done to raise awareness about employees’ and employers’ rights, obligations and the problem resolution processes to help increase understanding and knowledge, and dispel commonly held beliefs about the system.”[38] Only 1.8 per cent of personal grievance cases (18/986) were considered to have “lacked merit or were of a vexatious or frivolous nature.[39]

6.17 The proposed legislation, which allows an employer to dismiss staff without explanation, offends against natural justice, the presumption of the law in favour of procedural fairness, and a commitment to a fair go for employees. While the New Zealand courts have imported the rules of natural justice into the common law contract of employment since 1985, the proposed legislation with its “fire-without-redress” measures, runs counter to this. The right to due process is a fundamental rule of law issue.

6.18 The extension of the 90 day trial period to all workplaces as proposed in the amendment of s67A(1) and repeal of s67(4) of Employment Relations Amendment Bill (No 2) is retrogressive, as was the earlier amendment of the Employment Relations Act in 2008.

  1. EQUAL EMPLOYMENT OPPORTUNITIES IMPLICATIONS

This section of the Commission’s submission discusses possible unintended consequence of 90 day trial periods including their impact on investment, productivity and EEO.

7.1 Reduced Investment in staff development and training

7.1.1 Young people and other vulnerable groups such as Māori, Pacific and disabled people will be most at risk of being let go under the 90 day trial at a time when the unemployment rate for 15-19 year olds is 24.7 per cent (37,800 people) and for 20-24 year olds it is 13.7 per cent (30,400 people). Simply by virtue of being young they have had less time in the workplace to develop competencies and increase their employability. Many employers will not invest in staff development and training during the 90 day trial period. The first few months in a new job are a time when more support is needed, not less. This is most acute for new entrants to the labour market.

7.1.2 The idea that more support is needed for labour market new entrants has long been acknowledged by Parliamentarians. The MP, now Minister, Paula Bennett said at the time of the first reading of the Employment Relations Probationary Employment Amendment Bill in 2006: “Probation is a process of close supervision, monitoring, and assessment of new appointments’ work performance during their first three months of employment. When we start a job, many of us cry out for a bit more feedback, and more opportunity to see how our performance and our fit with the company is going.” [40]

7.1.3 In the 90 trial period legislation there is no incentive to ensure this level of supervision, whereas probationary periods do implicitly require demonstrable efforts on the part of employers to address any concerns about work performance in order to avoid claims of unfair dismissal. The proposal also sets up a hierarchy of trial and non-trial employees which will increase the precarious nature of some work. Trial employees will be on trial not only for the employer but in relation to non-trial work colleagues.

7.2 Casualisation and Productivity

7.2.1 The 90 day trial period will extend casualisation in New Zealand’s labour market at a time of increased concern at the country’s poor labour productivity, as noted by Professor Nigel Haworth in his commentary on the Bill.[41] Policy agencies repeatedly recommend that New Zealand needs to develop skills, improve management competence, redesign workplace organisation and stimulate technological uptake and capital investment. Further casualisation of the labour market will not address the critical issue of labour productivity. The relatively low level of productivity in New Zealand compared to other OECD countries is thought to be at least partly due to the rapid growth in labour utilisation.[42] That is, less skilled people taking lower paid jobs, and people working longer, less productive hours. Diminishing job security and reducing incentives for investment in staff development are unlikely to address this issue. The five key drivers of productivity growth according to The Treasury are enterprise, innovation, skills, investment and natural resources.[43]

7.2.2 The Bill’s policy intention states that trial period provisions “can improve labour market flexibility”. However New Zealand ranks as “among the least restrictive of OECD countries in terms of labour and product market regulation.”[44] In terms of the cost of firing the World Economic Forum rates New Zealand as one of the cheapest.[45]

7.3 Reduced commitment to fair recruitment practices

7.3.1 Fair recruitment and effective induction is a significant element in the good employer model developed by the Human Rights Commission and promulgated widely to New Zealand businesses.[46]

7.3.2 The Commission urges organisations to implement an impartial, transparent employment process with no barriers or biases to employing the best person for the job regardless of gender, ethnicity and disability; and to provide a comprehensive introduction to the organisation for all employees setting out the organisation’s values and employee opportunities.

7.3.3 The Commission also encourages organisations to:

7.3.4 The trial period extension to medium and large businesses may reduce the imperative to have fair recruitment practices as good employers. Some will use the 90 day trial extension as a proxy for investment in effective human resource management. This is likely to impede the progress being made by a majority of medium to large New Zealand businesses in ensuring pre-employment processes are not discriminatory and in developing recruitment practices that acknowledge equal employment opportunities.

7.3.5 The trial period extension is also at odds with the intent of the good employer provisions in the State sector. For example, the Crown Entities Act requires Crown entities to operate personnel policies that provide opportunities for the enhancement of the abilities of individual employees (at s118(2)(e) and to recognise the aims and aspirations and the employment requirements of groups recognised as being disadvantaged in the labour market, such as women, persons with disabilities, Māori and ethnic and minority groups. These requirements are repeated in the State Sector Act.

7.3.6 The RIS prepared by the Department of Labour on the amendment notes that compliance costs for employers around hiring practices, performance management and dismissal will be reduced. Given the international comparisons that indicate firing costs in New Zealand are minimal,[47] this suggests that investment in fair recruitment and performance management is predicted to diminish under the proposed extension of trial periods. One of the main arguments advanced for introducing 90 day trial periods for small enterprises with less than twenty staff was their limited human resource management capability. This justification does not appear to applicable to medium and large companies. In the National Conversation about Work the Commission did not encounter large employers concerned about the cost of effective recruitment.

7.3.7 International research on the effect of length of probationary periods found a correlation with recruitment quality, that is, employees were recruited more carefully when the probationary period was reduced.[48]

7.4. Employment opportunities for disadvantaged groups

7.4.1 The Bill is being introduced at much the same time as new legislation to establish a Productivity Commission. The Explanatory Note states the case for such an agency is made in the context of New Zealand’s current economic challenges. These include: “Relative low rates of participation in education and training amongst some population groups (e.g., some age groups, socioeconomic groups, Māori and Pacific Island people)...”.[49]

7.4.2 There is no evidence that the 90 day trial will increase employment. The Department of Labour’s evaluation of the first year of operation of trial employment periods indicates that it cannot be stated categorically that trial periods have created extra job opportunities. In the trial period, the Department found, very few employers gave a chance to disadvantaged job-seekers. The report states: “Most employers interviewed were seeking the best candidate regardless of whether they might be categorised as disadvantaged job seekers.[50] Internationally trial period legislation has increased hiring and firing but has had an unclear overall impact on employment.

7.4.3 Employers in small to medium enterprises interviewed during the National Conversation about Work supported the 90 day trial period, because it mitigated the emotional and economic cost of “getting it wrong” when hiring staff. The Commission concurs with the Department of Labour findings that the 90 day trial is not being used by most employers to give disadvantaged job seekers, in particular, an opportunity to work.

  1. CONSTRAINED CONSENT

8.1. The idea that the proposed legislation rests on contract and agreement and cannot be imposed on employees who do not agree to a trial period is unrealistic, particularly at a time of high unemployment and job scarcity. An employee, desperate for work, faced with a “take it or leave it” offer by an employer is in no position to negotiate “opting out” and has no real choice. Any exercise of such choice may also be anticipated to be perceived negatively by Work and Income.

8.2 Given that women historically have a poor record of negotiating their workplace conditions they are likely to be disadvantaged in such processes. This was noted in the first Employment Court decision on the 90 day trial period when Chief Judge Colgan stated that the plaintiff: “was not about to jeopardise the security of her ongoing employment by resisting agreeing to such parts (of the employment agreement) as the trial provision.”[51]

8.3 Migrant workers are also disadvantaged in this situation. The Commission in its engagement with migrant communities has knowledge and experience of their reluctance to complain about trial periods in employment. They also lack knowledge of their employment rights and have limited union coverage. Also many have cultural traditions that do not allow them to easily enter into contract negotiations as an equal party.

8.4 The Department of Labour evaluation found that: “...although three quarters of employers knew a trial period must be mutually agreed, they generally did not directly seek employees’ acceptance of a trial period, rather it was stated in the employment agreement with other terms and conditions. Thus in practice for many employees the job offer was conditional on their accepting a trial period, as is the case with other terms and conditions of an employment offer.”

8.5 Employees who have been dismissed under the 90 day trial period are likely to experience prejudice in seeking work subsequently. Correspondence received by the Human Rights Commission from people who have failed to secure ongoing permanent employment via the trial period indicates that this is already happening. At recruitment it is highly likely that employers will have a negative perception of applicants that have “failed” a previous trial placement.Absences in work records and CVs already attract employer attention during the recruitment process.

8.6 The RIS noted: “There are social and opportunity costs for employees who are dismissed without an explanation. There is anecdotal evidence that an employee dismissed while on a trial period can find it difficult to get a new job.”[52] A further concern is that dismissed employees will be subject to stand-down periods prior to accessing social welfare benefits without accessing employment protections against unfair dismissal.

  1. DECENT WORK

9.1 The 90 day trial period might be seen as having the effect of increasing employer power under the guise of labour market flexibility. Employees subject to the 90 day trial period may feel that they are being treated as if they are disposable assets, which is contrary to the decent work agenda that successive Government have subscribed to. The justifications for the extension of the 90 day trial period are inconsistent with the findings of the Commission’s National Conversation About Work which show that New Zealand’s workplaces overwhelmingly have cultures based on trust, engagement and performance. There was a genuine acceptance by both employers and employees that decent work underpinned a fair society.

9.2 Not all employers are good employers and some will behave badly. The current provisions are adequate (and necessary) to deal with this. It is not fanciful to envisage that trial period employees feeling compelled to work excessive hours, tolerating poor working conditions, or performing functions that they were not hired for or are unacceptable, simply because they are “on trial” and want to keep their jobs.

9.3 Decent work over the years has encompassed different legislative and policy responses. However, retrogression of the well developed right-to-redress principle in employment situations is unprecedented.

  1. UNION ACCESS

10.1 International human rights instruments clearly protect the right to form and join trade unions which includes the right of unions to function freely.

10.2 The explanatory note to the Bill states: “The intention is not to unreasonably limit access by members of a union to a union representative or unreasonably impede the ability of a union representative to undertake the lawful business of a union...”.The Commission is of the view that the likely effect of amendment will be to frustrate union activity in the workplace, primarily because of the notice period proposed.

10.3 The RIS notes that: “There does not appear to be widespread evidence of union representatives exercising their current rights to enter workplaces in an inappropriate way, resulting in disruption for business operations or adversely impacting on the employment relationship between employer and union members ... The Department has no evidence to suggest that unions are not, in general, meeting this requirement, or that employers are dissatisfied with current arrangements and practices.” This is supported by international comparisons that rate New Zealand 15th (out of 133) in “generally co-operative labour-employer relations.”

10.4 During the National Conversation About Work, the issue of union access was not raised once by employers as an issue for them. In a number of instances union officials talked about access being obstructed by employers.[53]

10.5 The insertion of a new s20A bureaucratises and makes more difficult union access to workplaces and union members. The Commission in its dispute resolution function has found that early intervention in a dispute helps mediation and prevents escalation. During an industrial emergency or when an immediate issue arises, delayed access is likely to inflame rather than resolve industrial problems.

10.6 The Ministry of Justice’s advice to the Attorney-General notes the Bill’s proposals may be inconsistent with the right to freedom of association under s17 of the New Zealand Bill of Rights Act. Namely that the Bill “creates the prospect of short temporal interference with the right of union representatives to associate with employees and only in the workplace.” The Ministry suggests this is justifiable as it is only minimal interference.

10.7 The Commission is of the view that there is insufficient evidence to justify this limitation on the right of freedom of association and considers the Bill’s proposals are inconsistent with international human rights instruments and the New Zealand Bill of Rights Act.

  1. CONCLUSION

11.1 The Human Rights Commission has considered two aspects of the Employment Relations Amendment Bill (No 2), namely the 90 day trial period and changes to union access to workplaces.

11.2 The 90 day trial period removes critical protections against unjustified dismissal, such as the right of redress. The proposed changes are inconsistent with international human rights standards, the rule of law, a commitment to equal employment opportunity, and the decent work agenda successive New Zealand governments have signed up to.

11.3 The principle of progressive realisation of rights is a central tenet of international human rights. The proposed retrogressive measure is contrary to this principle.

11.4 Proposed changes that will limit union access to workplaces are also inconsistent with the New Zealand Bill of Rights Act and international human rights standards. The Commission is of the view that the limits to the right of freedom of association are not minimal and are not justified in a free and democratic society.

11.5 The Human Rights Commission considers these aspects of the Bill are fundamentally flawed and should be withdrawn.


[1] S.5(1)(a) Human Rights Act 1993
[2] Part 3
[3] S.5(2)(k)(iii) Human Rights Act 1993
[4] S.5(2)(c) Human Rights Act 1993
[5] S.17 Human Rights Act 1993
[6] These figures exclude complaints and enquiries relating to comments made by MP Hone Harawira which distorted the figures for the 2009-10 year.
[7] Universal Declaration of Human Rights (UDHR), adopted 10 Dec.1948, G.A. Res.217A (III) UN Doc A/81(1948)
[8] ICCPR, adopted 16 December entered into force 23 March 1976
[9] ICESCR, adopted 16 Dec. 1966 entered into force 3 Jan. 1976, G.A. Res.2200A (XXI), UN Doc. A/6316 (1966)
[10] The Right to Work General Comment No. 18 Adopted on 24 November 2005 Article 6 of the International Covenant on economic, Social and Cultural Rights E/C.12/GC/18 6 February 2006
[11] Ibid at 4
[12] Ibid at 51
[13] Ibid at 54
[14] ILO Convention 29 on Forced Labour (ratified in 1938); ILO Convention 98 on the Right to Organised and Collective Bargaining (ratified in 2003); ILO Convention 100 on equal remuneration (ratified in 1983); ILO Convention 105 on Abolition of Forced Labour (ratified in 1968); ILO Convention 111 on Discrimination (Employment and Occupation) (ratified in 1983) and ILO Convention 182 on the Worst Forms of Child Labour (ratified in 2001Ministry of Foreign Affairs and Trade: New Zealand Handbook on International Human Rights 3rd ed. (2008) at 37
[15] New Zealand has not ratified ILO Conventions 87 on Freedom of Association and Protection of the Right to Organise and 138 on Minimum Age
[16] Ibid. at 37
[17] www.dol.govt.nz/services/decentwork/overview/objectives.asp at 1/09/2010
[18] For further on this see statement by the Committee: An evaluation of the obligation to take steps to the “maximum of available resources” under an optional protocol to the Covenant (E/C.12/2007/1)
[19] At par 19 The Right to Work General Comment No. 18 Adopted on 24 November 2005 Article 6 of the International Covenant on economic, Social and Cultural Rights E/C.12/GC/18 6 February 2006
[20] At par 20 ibid.
[21] At par 34 ibid
[22] At par 25 ibid
[23] P35 G20 commit to “putting Quality Jobs at the Heart of the Recovery” World of Work, No 67, December 2009 ILO
[24] Employment Contracts Bill Introduction Hansard December 19 1990
[25] Employment Contracts Bill Second reading Hansard April 23 1991
[26] Research on Personal Grievances, Department of Labour 10/93795 16 April 2010
[27] Smith v. Stokes Valley Pharmacy(2009) Ltd [2010] NZEMPC 111 WRC14/10 at 48
[28] Par 2.1.3 Trial Employment Periods An Evaluation of the First Year of Operation Department of Labour June 2010
[29] Ibid par 2.3
[30] Smith v. Stokes Valley Pharmacy(2009) Ltd [2010] NZEMPC 111 WRC14/10 at 82
[31] Smith v. Stokes Valley Pharmacy(2009) Ltd [2010] NZEMPC 111 WRC14/10 at 26
[32] Law Link Hired to Fired in 90 days Autumn 2009
[33] Union and BurgerFuel reach employment consensus 27/9/2010 NZPA
[34] Par 24.3.5 Constitutional & Administrative Law in New Zealand 3rd Edition Philip A Joseph
[35] ibid
[36] Research on Personal Grievances, Department of Labour 10/93795 16 April 2010
[37] Regulatory Impact Statement Amendments to the Employment Relations Act 18/6/201
[38] Research on Personal Grievances, Department of Labour 10/93795 16 April 2010
[39] ibid
[40] Employment Relations (Probationary Employment) Amendment Bill First Reading Hansard 15 March 2006 vol 629 p1846
[41] ‘Fire at will’ measure damaging to labour performance and economy Nigel Haworth Sunday Star Times 29 August
[42] Angel Gurria ibid
[43] Putting Productivity First The New Zealand Treasury April 2008
[44] Angel Gurria Lifting productivity: lessons from the OECD 29 July 2008 address to the Wellington Chamber of Commerce
[45] Table 7.05 p424 Global Competitive Report 2009 -2010 World Economic Forum
[46] http://www.neon.org.nz/crownentitiesadvice/howtobeagoodemployer/employmentissues/ at 02/09/2010
[47] Table 7.05 p424 Global Competitive Report 2009 -2010 World Economic Forum
[48] I Marinescu Job Security Legislation and Job Duration: Evidence from the UK Journal of Labour Economics Vol 27 no 3, 2009
[49] Regulatory Impact Statement – NZ Productivity Commission http://www.treasury.govt.nz/publications/informationreleases/ris/pdfs/ris-tsy-nzpcb-jul10.pdf
[50] Trial Employment Periods An Evaluation of the First Year of Operation Department of Labour June 2010

[51] Smith v. Stokes Valley Pharmacy(2009) Ltd [2010] NZEMPC 111 WRC14/10 at 33
[52] P17 Regulatory Impact Statement Amendments to the Employment Relations Act 2000
[53] National Conversation About Work, Nelson, Marlborough, Tasman Regional Report Human Rights Commission July 2009


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