Hon BROOKE VAN VELDEN (Minister for Workplace Relations and Safety): I move, That the Employment Relations (Trial Periods) Amendment Bill be now read a second time.
The Employment Relations (Trial Periods) Amendment Bill is a very important bill for us to pass before Christmas. This bill will extend the availability of 90-day trials as an option for all employers, repealing what the previous Government did by restricting the availability to only small businesses. Currently, the law for 90-day trials as an option in employment agreements exists only for businesses or companies with fewer than 20 employees. Extending this trial will make a huge difference to the flexibility of our labour market, because larger businesses employ around 72 percent of all employees in New Zealand.
We are debating this bill under urgency because it is within the Government's 100-day plan and is a commitment that we want to restore business optimism and confidence before Christmas, so that businesses and workers are going into the new year with certainty over the labour market. There is no time to waste in getting rid of the bleak economic environment and outlook that was left by the previous Government. We need to get the labour market settings right so that businesses and workers can both keep their heads above water.
We've gone through the history of 90-day trials in the first reading, but why this Government is reintroducing and extending 90-day trials to all businesses is because we've heard loud and clear from employers up and down New Zealand that they want more confidence in the labour market, so that they can take a chance on someone who might be seen as a riskier worker. Workers deserve that right as well.
Whether a business has two employees or they have 200 employees, there is a cost to doing business. There is a cost to hiring a new employee and bringing them into the workforce. It takes money, it takes time, it takes resources, and everybody wants that worker and that employee to work well with the employer. It's in everybody's best interests to find the right fit. It increases productivity in the workforce, it helps to make sure that you've got the culture right within the workplace, and, importantly, it gives the opportunity for somebody who may not have had a fair chance a chance in a new environment. They might not have the right skill, they might not have the right qualification, but if they have the right attitude, they can find a business who'd be willing to give them a go.
Apart from the cost of the dismissal process, retaining an employee who is not the right fit can actually have a detrimental effect on all of the employees within that workspace as a whole. It can take only one employee who has a poor attitude or doesn't have the right skills to actually do the job to a good standard to take down a productive team. So it's important that we get the fit right between an employee and an employer.
The costs and risks that are associated with a dismissal can lead to a labour market with fewer employment opportunities, particularly for those people who are trying to just get a foot in the door—people with criminal convictions, as an example. The costly dismissal process, which we would be removing for all employers, can make the workplace less productive. When businesses can employ only a certain number of people—because they're resource constrained, they are financially constrained—having a worker who is a poor match within that business is not giving an opportunity for somebody else who could do a better job or could be a better fit or could do the job at a higher standard than somebody else.
We have heard time and time again from businesses who tell us that this is their top priority for improving their own workplace culture, by lifting this unnecessary regulation. This bill will help people across New Zealand's economy, from farmers to retailers. There are many, many more that have sent in their stories, all the time when we were in Opposition, wanting to make sure that we got the labour market settings right so that they have confidence in employing new staff.
This bill will help employers take on new staff by reducing risks in the hiring process. This is particularly the case when employers are considering someone who doesn't tick all the boxes—people who might be considered risky, people who might not have had a job before, or people who have little job experience or maybe just don't present well in a job interview. It gives them an option and a chance.
Not all workers, of course, will be happy to have a 90-day trial clause in their contracts—that's fine; this legislation is for an option to have a 90-day trial. It is not mandatory for employees and companies to have a 90-day trial. Any short-term cost or concern or stress about having a 90-day trial in a contract will be outweighed, I consider, by the lack of stress of actually having a job and being given an option of employment.
Starting a business is a brave move. Hiring staff is a risky move. We are hopeful that everyone will find the right fit of employee for the right job. This gives businesses the opportunity to have that right fit without having an ongoing liability. So this Government supports businesses, we support workers, but we're a Government that will deliver for both. I commend this bill to the House.
ASSISTANT SPEAKER (Teanau Tuiono): The question is that the motion be agreed to.