u/Psychological_Oil947

So a while back I asked how we could make it fairer to both the employer and employee in regards to employment law around the context of "Bad Hires". With the cost it’s putting on businesses, therefore discouraging SMEs from starting or growing, limiting employment opportunities overall.

Now there was a lot of your typical political commentary around "Employers are bad" or "Employees are bad", but there were one or two good conversations. One in particular that got my attention was from someone who would be from the other end of the political spectrum than myself.

Should we adopt Australia's Fair Work Act 2009 regarding minimum employment periods and probationary periods in exchange for stronger union protections?

Australia's minimum employment period means that an employee cannot file an unjustified dismissal claim during this period (same as NZ 90-day trial period) but can still claim for discrimination (same as NZ 90-day trial period). However, the main difference is Australia's periods are 6 months for companies with 15+ employees or 12 months for companies with less than 15 employees (NZ has a 90-day trial period / 3 months).

Six months is enough time for a company to take more of a risk when employing. It’s enough time on average to get a ROI and therefore determine if the hire is an economically sound fit for the company, without the added cost of performance managing bad hire's out.

On the flip side as per Australia's Fair Work Act 2009 do we stregthen Unions legal ability to bargaining power, broader right-of-entry access for union officials, and formal protections through the Right to Disconnect?

In doing so we would be strengthening the rights of the longer term employees through Union access and right to disconnect while lessening the risk of bad hires, by giving the businesses a fairer evaluation period.

Anyway, as before, just wondering about others views of aligning NZ to a more Aussie approach, or do we think Australia's laws are too swayed towards the employee?

Seek latest survey shows Bad Hires are costing NZ Businesses over $900 Million a year (this is likely on the low side of reality). And this is only taking into account the direct costs of a bad hire like financial impact from performance management, additional recruitment costs and training required to get a replacement at an average of $20,000 per employee. It doesn't account for the indirect costs, like the impact of other employees having to take on the extra load, reputational impact on the business from the performance of bad hires, and the revenue impact of not having enough resources.

It also confirms what business owners are incountering. The total number of applicants for available positions are increasing, but the quality of applicants have dropped dramatically. Making the need to take on lower qualified employees and training them up to the required standard. This only increases the training costs required for each position.

In the survey it is estimated that 1 in 5 hires go wrong!

As a country we are very quick to jump on the rights of bad employees, however what about protecting good employees, protecting good businesses and encouraging further employment? What about the cost of living, SMEs are not making massive profits, most are scrapping through and leveraged up massively to compete against the big international guys. They are the backbone of our economy. This cost can't simply get absorbed out of thin air, the government doesn't help or support these businesses finanically in the case of bad hires (nor should they that's the risk of doing business). So the costs eventually get passed onto the end consumer.

Our economy is getting hit in multiple directions, and these laws are only making it harder to do business. Yes we have a 90day trial, but this data takes into account the 90day trial for SMEs (its been in place for over 17years).

Now with AI we have had a increase in people trying (and failing) to claim PGs against companies because they are looking for a easy payday, but this only increases companies costs as the business has to defend themselves against the claim which is just even more added costs.

My questions is, how do we protect good SMEs while also protecting good employees?

• We have 90day trial
• Current government is proposing that employee conduct will have more weight in decision process.

But further than this do we have any more ideas?

• Should we change our 90 trial to align with Australias 6month & 12month provisions?
• Should we implement penalities for failed PG claims so there is consequence for employees trying to extort businesses?
• Should we introduce a standard easier performance management process for businesses to follow?

This is just me venting / thinking out loud. SMEs were attacked by the last government who protected the big international businesses against competition, they've been largely ignored by this government, they are overregulated by local councils and they are targeted by shoplifters and crime. On top of this they cannot protect their good employees from the effect bad employees have on their business. Despite this many keep on thriving on while taking the beating this country gives them.