Small business group hits 18 out of 19

The Government is not prepared to give small employers a personal grievance-free period after they hire new employees, but is supporting 18 other recommendations from a small business advisory group.

Small Business Minister Lianne Dalziel announced yesterday that the Government supported in substance 18 of 19 recommendations in the August 2004 report from a group of nine people who owned small and medium-sized businesses.

Sixty per cent of new jobs in New Zealand in the past four years were in small and medium-sized enterprises. The Government's actions in response to the recommendations include extra funding for mentoring services; the Economic Development Ministry examining ways the Government can measure and publish the costs of compliance; changes to simplify depreciation and the fringe benefit tax; setting up a $40 million fund to help small and medium-sized enterprises to get capital.

Ms Dalziel said there were "other ways" the Government would explore to address the risks of hiring employees. The group was asking the Government to remove a probationary employee's right to file a personal grievance.

Its report said: "We believe that these are the single most important changes that could be made to the employment legislation and that they would lead directly and immediately to employment and business growth."

Ms Dalziel said the Employment Relations Act provided for a probationary period for new employees, with performance reviews and provisions that could lead to termination on the basis of non-performance.

Timaru businessman Murray Cleverley, a member of the advisory group, said the main aim was to minimise the risk of taking on new employees.
Ms Dalziel said even though employers had the right to dismiss a probationary employee for non-performance, there were employment consultants interested only in financial settlements from personal grievances.

Dunedin footwear manufacturer, Nigel McKinlay, also a group member, said employers might choose to pay out on a grievance, even though it might fail in court, because defending it would cost more in time and legal fees. Mr Cleverley said the group would work with the minister toward another solution.

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