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the holidays act 2003

Annual Leave

The Act states that after the end of each completed 12 months of continuous employment, an employee is entitled to not less than three weeks paid annual holidays. The provision of four weeks annual leave as a minimum entitlement for employees does not come into force until 1 April 2007.

Public Holidays

How many public holidays are employees entitled to?

Employees are entitled to 11 paid public holidays where holidays fall on a day that would otherwise be worked. Regardless on what day they fall, Christmas Day, Boxing Day, New Years Day and the day after are public holidays. In other words these holidays are "Monday-ised". If an employee works a public holiday, they must be paid time and a half, and if entitled, the employee must also be given a day in lieu.

How much is an employee paid on a public holiday?

If an employee does not work on a public holiday and that day would otherwise be a working day for the employee, the employer must pay the employee not less than the employee’s relevant daily pay for that day, and including commission and overtime if they apply.

When is an employee entitled to an alternative holiday?

An employer must give an employee an alternative holiday if-
1. the public holiday falls on a day that would otherwise be a working day for the employee; and
2. the employee works (in accordance with his or her employment agreement) on any part of that day.
An employee may be required to take the alternative holiday on a date determined by the employer only if-
1. 12 months have passed since the employee’s entitlement to the alternative holiday arose
2. the employee and employer cannot agree on a date for the alternative holiday to be taken
3. and the employer gives 14 days notice as to when they require the alternative holiday to be taken.

How much is an employee paid on an alternative holiday?

If the employee is entitled to an alternative holiday the employer must pay an employee not less than the employee’s relevant daily pay for the day which is taken as the alternative holiday.
An employee may request the employer to exchange the alternative holiday for a payment. A request-
1. may be made only if 12 months have passed since the employee’s entitlement to the alternative holiday arose; and
2. may be made whether of not the employee has been required to take the alternative holiday.

How does the Act relate to on-call workers?

If an employee is on call on a holiday that is a day that would otherwise be worked and he or she is called in for any period of time, they are entitled to a full alternative holiday.
If the on-call worker is not called in to work the holiday, but the nature of the restriction imposed on them by being on call has restricted their freedom, it is considered that the employee has not had a full day’s holiday and is therefore entitled to an alternative day.
This does not apply to an on-call worker who is only on call on public holidays.

Important to Note!

"Pay as you go holiday pay"

Employers should be wary of incorrect payment of "pay as you go holiday pay". If the employee is incorrectly paid "pay as you go holiday pay" then the employer must make amends for this by paying the employee for public holidays on top of any holiday pay already received and, if the employee is entitled, giving an alternative holiday as well.

The definition of "Continuous Employment

The Act defines "continuous employment" as including any period during which the employee was on paid holidays or leave, parental leave, protected voluntary service or training, ACC, unpaid sick leave or bereavement leave, or unpaid leave for any other reason for a period of no more than one week.

Redefinition of "Ordinary Pay"

The Act redefines "ordinary pay" to mean the same thing as "average earnings". "Ordinary pay" is now to be based on the previous four weeks’ income including incentive payments.

Independent contractors are not entitled to any paid holidays, sick leave or bereavement leave.

Sick Leave and Bereavement Leave

Splitting Sick Leave and Bereavement leave

The Holidays Act 2003 separates the entitlements for sick leave and bereavement leave.

When does the employee become entitled to sick leave and bereavement leave?

An employee is entitled to sick leave and bereavement leave:
1. after the employee has completed six months current continuous employment with the employer or;
2. if the employee has worked at least an average of ten hours a week during a six month period and;
3. no less than one hour in every week during that period or no less than six.

How much sick leave is an employee entitled to?

An employee is entitled to five days sick leave. Employees may carry over a maximum of 15 days sick leave, allowing a maximum of 20 days sick leave to be taken in one year. Accumulation only by agreement.

How much bereavement leave is an employee entitled to?

An employee may take three days leave for a bereavement where the death is the employee’s; spouse, parent, child, sibling, grandparent, grandchild, or spouse’s parent.
An employee is also entitled to one day of bereavement leave for the death of any other person where the employer considers the employee has suffered a bereavement. Relevant factors include:
1. the closeness of association between the employee and the deceased person,
2. whether the employee has to take significant responsibility for all or any of the arrangements for the ceremonies relating to the death,
3. any cultural responsibilities of the employee in relation to the death.
The Act does not impose limits on the amount of bereavement leave that can be taken in the course of the year if the employee suffers multiple bereavements.

How much is an employee paid while on sick leave or bereavement leave?

For sick leave or bereavement leave the employer must pay the employee an amount that is equivalent to the employee’s relevant daily pay for each day of sick leave or bereavement leave taken that would otherwise be a working day for the employee.
An employer is not required to pay an employee for any time for which the employee is paid weekly compensation under the Injury Prevention, Rehabilitation, and Compensation Act 2001 or former Act.

Penalties

What are the penalties for non-compliance?

Any employer who fails to comply with any of the provisions of the Act is liable-
1. to a penalty not exceeding $5000 if the employer is an individual
2. to a penalty not exceeding $10 000 if the employer is a company or other body corporate.

We are employment law specialists so please feel free to contact us at Barbara Buckett & Associates if there are any issues raised in this update you would like to discuss further.

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