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The Employment Relations Amendment Bill proposes only employers with 20 or fewer employees will be able to include a 90-day trial period in contract times.
TIA chief executive Chris Roberts said abolishing the 90-day trial period and stipulating specific times for rest breaks was impractical for tourism employers.
The 90-day trial period gave employers some security they would not be stuck with an employee who was not right for them.
Without the period, employers lost a safety net and could be less likely to take on inexperienced employees.
"Anyone who works with young people who have just left school or graduated from university, or beneficiaries returning to the workforce, knows all they want is their chance to show an employer what they can do."
The Bill could deny them the chance. The Government wants to get New Zealanders into work, and the TIA supported any approach to enable that to happen. Taking away the 90-day trial period was a barrier to employment, Mr Roberts said.
The Otago-Southland Employers Association says proposed changes to employment law should be carefully scrutinised to ensure the strengths of the current employment relations framework are not lost.
Chief Executive Virginia Nicholls said the Bill required more work to achieve a balance between the rights and needs of employees and employers.
"The Bill's intention of protecting employees and their representatives is understood. However, the Bill as written will impact negatively on workplace flexibility, productivity and competitiveness.
"Compulsion on employers to take part in collective bargaining and to reach agreement on a collective agreement regardless of bargaining terms is not fair."
The association was pleased the 90-day trial period would still be available to some businesses, but it was not fair on larger businesses, she said.
Requiring all staff to get meal and rest breaks at statutory times would remove flexibility from workplace operations.
There were some rigid requirements which would reduce flexibility and productivity in workplaces, Mrs Nicholls said.
Mr Roberts said tourism operators were also concerned about the clauses stipulating when rest and meal breaks should be taken.
Employees who could not agree on a time for rest and meal breaks with their employers would have the right to take rest breaks "exactly halfway" through the morning and the afternoon. The meal break would be taken exactly in the middle of the day, he said.
"This is totally impractical for many in the tourism industry."
Now, many tourism operators rotated staff so some employees were on duty while others could take their break.
If all employees started shifts at the same time, they had to take their breaks at the same time, affecting the levels of service available to visitors, Mr Roberts said.
He urged the Government to consult with the tourism industry on how best to protect tourism employees while ensuring visitors received world-class service.