A leading employers group says unions are over-reacting when they say a new probationary period for new employees leaves workers open to abuse.
The newly amended Employment Relations Act, which came into effect on 1 March, includes a 90-day probationary period during which small companies employing fewer than 20 staff can sack new workers without right of appeal.
Opposition politicians and some unions have said the legislation makes young or low paid workers vulnerable.
Employers and Manufacturer's Association chief executive Alasdair Thompson says they are over-reacting. He says the Act means companies may take on workers they would otherwise be wary of hiring, and if those staff are good at their jobs they will be retained.
One of the main unions for workers in the service industry says it is ready to use shame tactics against employers who abuse the new Act.
Unite Union spokesperson Mike Treen says Unite will be keeping a close eye on employers and has a team on standby to organise protests outside the sites of companies considered to be abusing the law. These protests could include the use of a giant inflatable rat.
Mr Treen says young or low-paid workers are already open to employment abuses.
A partner in law firm Kensington Swan, Susan Hornsby-Geluk, who handles employment issues, says employers will effectively make the trial period a condition of employment, and if new workers do not accept it they will not be offered the job.
Labour Minister Kate Wilkinson says the law gives businesses the confidence to take on new staff and gives people who have been out of the workforce for some time the chance to prove themselves.
Labour MP Trevor Mallard describes the trial period for new workers as "fire at will" legislation.
Mr Mallard, the party's labour relations spokesperson, says people will be less likely to seek work within small businesses because they will fear being fired.