3 Feb 2011

Study finds 90-day scheme has positive jobs impact

10:01 am on 3 February 2011

A study has found the Government's 90-day probationary period for workers has led to more jobs.

A trial of the scheme was introduced in 2009 for businesses with fewer than 20 people, and will be extended to all businesses from April.

The Institute of Economic Research's report found a small but positive impact on hiring by small and medium-sized businesses between April and September 2009, when the overall jobs market was shrinking due to the recession.

Under its modelling, the Institute says, hiring by firms allowed to use the scheme was was six percentage points higher than expected. The total number of jobs was two percentage points higher.

Labour Minister Kate Wilkinson says the findings put the opposition to the scheme into perspective.

However the Council of Trade Unions says the report's conclusions are misleading.

CTU president Helen Kelly says the research simply shows that all firms reduced their hiring, and that small business reduced their hiring less than big business.

But she says it fails to show any evidence of a link between hiring and the 90-day employment law.

Ms Kelly says the study should also show firing of workers rose, but those figures are not included.

Report author Bill Kaye-Blake told Morning Report about 13,000 people had jobs during the period who wouldn't otherwise have been employed.

Dr Kaye-Blake said the employment rate was higher than expected and the logical conclusion is that one of the reasons is employment policy.

The law allows employers to fire workers within the first 90 days without the need to justify the dismissal.