Employment Relations Amendment Act – 90 day employee probation

On 12 December 2008 the New Zealand Government passed the controversial Employment Relations Amendment Act.

Since 1 March 2009, this legislation provides small businesses with fewer than 20 employees the right to dismiss an employee within the first 90 days of employment without the employee having the right to lodge a personal grievance case against the employer for unfair dismissal.

So what does this legislation mean to a new migrant? There are two schools of thought:

First, concern has been raised that employers may use the legislation to dismiss an overseas migrant on minor performance related issues or if they simply change their mind if the migrant is having difficulty adjusting to the work place environment during the initial period of their employment.

Difficulty may arise in the event the employer decides not to continue to offer employment to the migrant before residency is granted or, in the alternative, before the employee has completed the three months of full time employment post the grant of New Zealand residence that is required as per immigration regulations.

The loss of a position could ultimately lead to not only the revocation of the migrant’s work visa, but also the decline of the residence application. This understandably would create serious issues for migrants who are unlucky enough to find themselves already settled in New Zealand.

Second, because of the major risk to small organisations hiring an employee who does not perform, there has been reluctance by a number of employers to take a chance and hire a migrant. As a result of the legislation it is possible that many New Zealand employers who are having difficulty recruiting may take a chance on a skilled migrant from overseas knowing that if it does not work out well within 90 days they have an option to dismiss.

Allowing an employer to take a risk and hire a migrant may equate to more job offers being provided to migrants across the board.

It is difficult to conclude at this early stage as to what material effect the change in Government policy will have on new migrants.

It is hoped, therefore, that the legislation does encourage small employers to take a chance in hiring an overseas migrant. Perhaps the 90 day probation legislation will be the encouragement needed to a vast number of employers to take a chance. With this chance, however, there is a risk that will unfortunately be placed upon the shoulders of the migrant.

Businesses with more than 20 employees remain unaffected by the new legislation.

-written by Mark Williams, Lane Neave Lawyers

Mark leads the immigration team at Lane Neave. Having specialised in the practice of immigration law since 1999, he has extensive knowledge and is skilled in all areas of immigration law and policy. Mark is a lecturer in immigration law at the University of Canterbury and is a Director of the New Zealand Association for Migration and Investment.