Wednesday, 10 December 2008

90 days to take a chance on some talent [updated]

There’s outrage around the union- and compulsion-dominated traps that the new government is about to allow employers and employees to test each other out for ninety days before the full, costly, restrictive panoply of labour law descends to intrude upon the relationship.

Council of Trade Unions President Helen Kelly says

    it will bring about bad practice in small businesses, instead of businesses being very careful when employing people and checking their references. She says people should have dignity at work and be treated fairly.
    Ms Kelly says unjustified dismissal and unjustified disadvantaged are being removed from the law. She says under the bill people can be sacked for attending their grandmother's funeral or being sick, which have nothing to do with incompetency.

Association of Salaried Medical Specialists executive director Ian Powell says

    the practical effect of the law change will be to increase the vulnerability of new employees at precisely the point when they are most vulnerable. He says denying rights of protection against unfair dismissal is dangerous in the hand of bad or inexperienced employers

Neil Jones at The Standard says the decision to introduce the legislation under urgency

is frankly an astonishing abuse of our democracy. A piece of legislation that will remove basic work rights from hundreds of thousands of New Zealanders in any one year is being rammed through Parliament without any discussion or debate.

And summing it all up Sue Bradford calls it “a disgraceful attack on both workers' rights and on democracy.”

They appear to think that it is only the intrusion of government that keeps wages and conditions up, rather than the productive profit-seeking of entrepreneurs and businessmen, and that in the absence of intrusion – even for ninety days – the conditions of workers will go to the wall. 

They seem to consider that employers hire employees only to dismiss them, instead of to put them to work.

They seem unaware that as the world’s economic crisis hits home here in New Zealand job-seekers are going to need every bit of help they can to find new employment, and this is a small step towards that.

They seem to have forgotten in their “anger” over urgency that a substantively similar bill was presented and much debated just two years ago -- and in the case of The Standard they seem to have forgotten all their arguments in favour of ramming through under urgency the Electoral Finance Act and the Emissions Trading Act, two of the biggest assaults on democracy, free speech and prosperity seen in recent years, and both of which saw the bills being written as the earlier clauses were being passed.

And they seem blithely unaware that there are many people who want desperately to become a worker, but who are locked about because present employment law discourages employers from taking a risk on them – that a ninety-day trial is just what many would-be workers need in order to prove themselves. 

This is not an attack on workers.  It’s a leg up for those who want to work, but who are presently locked out.  The facts are these:

It could only be a bad or inexperienced employee advocate who was unaware that to invest ninety days in a  new employee is a considerable investment – since the new employee who hits the ground running on day one is rare – a “sunk cost” that no reasonable employer would throw away on a whim in the manner Ms Kelly and Mr Powell and Ms Bradford think they will.

It could only be an incompetent employee advocate who was unaware of the risk every employer takes when they hire every new employee, and the risk is often highest with those who need employment the most -- the young, the old, the inexperienced, the under-qualified, those who’ve been out of work or their profession for a while – and who an entrepreneurial employer might consider for their position  if they have to chance to “try before they buy.”

And it could only be a politician who could call this an attack on “workers’ rights” when what it is in fact is a step, a small step, towards helping the unemployed become workers.

The fact is that every business and every entrepreneur survives by taking a risk; by seeing a new vision or a new idea, assessing it, and then backing their judgement.  That’s where wealth (and jobs) comes from.  But while they live by risk, present employment law does not encourage them to take risks when they choose who to hire because, as too many Employment Court decisions have shown, letting an unsuitable employee go is a about as easy as getting David Cunliffe to express humility: which means the downside of hiring someone who turns out to be unsuitable is high.

The fact is that in in the present legal environment when an employer has to choose between John who’s well-qualified but dull and Hone who is less-qualified and less-experienced but perhaps a little sharper, the employer is more likely to offer nice-but-dull John their job, and to show Hone the door.  Too risky, you see.  Too expensive a process if your personnel department gets it wrong. Much easier to play it safe and select the employee who just ticks all the boxes, and let the “riskier” candidate go.

You see, present law favours nice-but-dull, while it lowers the boom on those candidates who need someone to take a risk on them. Those “riskier” candidates are finding it hard to get a toe on the employment ladder, and the fact is that present employment law is helping to making that happen.

We all suffer by that – employers and manufacturers who miss out on good talent at good prices; would-be employees who keep finding the door shut in their face; and consumers, who don’t get to take enjoy the products of what this pool of untapped talent can do.  In a time of rising unemployment, every barrier to productive employment that can be removed is worthwhile. Every job-hunter should welcome this move. 

But there is one group who suffers disproportionately more than any other from the way restrictive employment law forces employers to ‘play it safe,’ and despite the great boon this bill would offer them they are unlikely to be listening to any of the arguments, or contacting Ms Kelly or Mr Powell or Ms Bradford to tell them to pull their heads in.

That group is the seemingly unemployable and unemployed Maori youth.

Whatever you believe about the present unemployment figures (a rate of just under 4%, with every chance of that increasing) there are nearly 300,000 people are either on a benefit or otherwise seemingly unemployable.  Included in those figures are a whopping 27% of young Maori who are unemployed – young talent that is under-skilled, under-experienced, under-qualified (and in too many cases criminally-qualified). These are the very people who most need somebody to take a risk on them – who need employers to be free to take a chance on them.

But they aren't listening to this debate.  They won’t be ringing Ms Kelly and Mr Powell and Ms Bradford to tell them to sit down and shit up. 

There's someone who could ring them on their behalf though.   Someone who could make a tangible difference.  With some justice, the Maori Party could point out to them that present employment law locks out “their” people.  They could call this present employment law racist -- and in this case they might actually be right.  It's targeted against the very group the Maori Party claim to represent. It makes life worse for them.  This one bill could do more to open doors for under-skilled and under-qualified young Maori than any hundred government programmes aimed at closing their gaps -- it would give them the chance at real employment, and the chance for many of them to turn their lives around.

Maybe the ones who should be fronting this debate with Kate Wilkinson are those two who could most easily silence the likes of Kelly, Powell and Bradford.  But are Tariana Turia and Pita Sharples  really aware of the issues at stake?  We might find out sooner than we think.

UPDATE: “The Maori Party failed their first test of common sense.” – Cactus Kate, in her post ‘Maori Party – FAIL.’


  1. All of that, PC.

    And for the usual collection of whingers, it's also the simple matter of it not being - literally - their damn business.

  2. Oh, and watch for media to 'balance' reports of the many in favour of the move with, well, take your pick from the usual suspects. Sue Bradford, Laila Harre or Helen Kelly could all be starters.

    Bets, anyone? ;)

  3. "And for the usual collection of whingers, it's also the simple matter of it not being - literally - their damn business."

    Oh, dead right. But that goes without saying around here, huh?

    I thought I'd try to explain it gently to them, on their own terms, why their opposition is destructive.

  4. MSM 'balance' reports Sus?

    While I realize the stuff survey on the 90 day law (66% in favour of the new law) and the viewers feed back on TV Breakfast this morning (again 66% in favour) are not scientific it does show the majority of the public are probably behind it. However you dont seriously expect the MSM to report what the public actually think and not what they believe we should think do you?
    No we will hear from the usual suspects that you name with the usual bull. I fear the MSM are not what you would call up with public mood.

  5. Quite right, Lucy.

    It used to annoy me that the NZ Herald, for example, would invariably print *similar* numbers of letters from both 'sides' of an argument, presenting the illusion of opinion being split down the middle, no matter how weighted opinion might really be.

    That was the point I was trying to make ... poorly? ;)

  6. I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.


  7. I wonder how much more semi-Liberal legislation the Nats wil pass this term. I'll try to vbe optimistic.

  8. Sigh. The Maori Party have come out against the probation period. I see nothing to fear in this, I've had contracts before in which there was a 90-day easy-out option. Admittedly they may not have stood up in court, but they were there and gave fair warning that you had to show you could add value within 90 days or shit would happen. It's a non-event IMHO.

  9. We took on two new employees recently. Both had been out of work for an extended period and both were unskilled. That meant that they required a lot of on-going training, work clothes, boots, safety gear, jackets, tools and so forth. Neither had the money to purchase any of that. The investment by the company to solve that issue was significant.

    Not so long ago one of the guys came into the office with a medical certificate requiring him to remain at home for two weeks and then be readmitted to light duties. When I passed this over to the lady who deals with pay, tax, leave etc. she mentioned that over the last month and a half this particular character had not managed to attend a full five day working week. I thought I'd better follow that up and went off to ask around about how he was progressing. The senior technicians reckoned he was a good enough guy but that his timekeeping was poor and his reliability wasn't ideal. He was known to arrive at work without his kit, requiring him to go off home to retrieve items or borrow someone elses (which sometimes ended up lost or damaged). He would sometimes disappear for lunch and not return to site for several hours. Essentially this guy was unreliable. He would take advantage of the fact that he could get "lost" from a busy site.

    When he got back to work he got put on light cleaning the toilet duty, light cleaning the workshop duty, light cleaning the kitchen duty, light cleaning the cafe duty, cleaning, cleaning, cleaning, cleaning and more cleaning. Full time supervision, all day everyday. He eventually disappeared and has not come back again. The company has been lucky with him, but it has cost a great deal. It could have been much tougher to throw him out.

    Meanwhile the other guy has turned out to be a determined and ambitious person. After a really rough start (which resulted in some firm "talks") he started to show some interest and demonstrated an ability to pick up new skills. He'll be geting a call into the office for a progress discussion and a surprise bonus. It is likely he'll be going on a welding course early in the new year. If he does well, he'll be in line for a pay rise (welders, even junior ones, receive more pay). There is nothing altruistic in any of this. We need more welders. He likely needs the extra money that skill would bring for him. He will likely enjoy the respect enhanced skill and seniority brings as well.

    Thing is. Would the company hire young guys like this again? We'll be behind financially for at least 12 months over this new hire business. It could have been much, much worse. It also could have been a hell of a lot better had the govt not been such a huge distortion in business and education and society in geberal (including welfare). I've looked at this whole business with some interest and we'd be better off getting fabrication done off-shore and importing the lot. That's still an option. I wonder how much the National and ACT people understand.


  10. Lucy, self selecting polls are rubbish! Done by a proper polling company with quotas for education, employment status, age etc. would be far more reliable - just because you think it's a good common sense policy does not mean the rest of the country sees it that way. Stuff has had National winning the '05 election by a landslide, as well as Destiny getting seats in parliament.

    'media balance' - why not?!

  11. I used to work for a small business in Point Chevalier (printing industry) writing software for the automation of print formatting prior to publishing. I became friends with the owners and their children since I left them years ago. I've heard stories from them about how they hired someone and they ended up being taken to court by these employees over some disagreements about their job titles, time managements, unfair dismissal (not really a dismissal by the owners since one employee left on his own and claimed that it was impossible for him to work there anymore), lying about family funerals (one person made up that someone died in his family so as to have a bereavement leave) and so forth. The law has always, been on the sides of these unproductive employees according to the business owners. Despite all the hassles over the years, the couple have now brought in their children to run the business, one daughter runs the sales team and one daughter is responsible for the day to day running of the business and their son is the general manager. They've sold the business to a European corporation over 2 years, but they still run it from their new office in Great north Rd, Grey Lynn and expanding fast.

    The thing about this couple is that they're odd. They're diehard Labour supporters and I've told them a few times that the worker doesn't have any rights at all because the business (theirs) is a private property and that is where the law is wrong there in granting more rights to workers over private property owners. But they still argued that workers should still be protected from exploitation despite the court's rulings against them over the last few years over employment disputes.

    Real productive people (business owners) of the society such as Rod Drury are coming out to support the 90-day worker trial, while leechers, useless, unproductives such as Laila Harre, Matt McCarten, Helen Kelly, John Minto are coming out in force to oppose it.

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