Holidays Bill to increase costs and workload for employers

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Holidays Bill to increase costs and workload for employers


Business NZ Executive Director Anne Knowles today expressed disappointment that the Holidays Bill as reported back from select committee overrides two Appeal Court decisions on payment for public holidays and sick and domestic leave.

“To have to calculate a notional productivity-based payment when no production is carried out is a nonsense long understood in industries that actually measure productivity. This was clearly recognised in the Appeal Court decision Ports of Auckland and reinforced in Greenlea Premier Meats.

“Similarly those decisions accepted that any overtime that might have been required to be worked need not be paid when the employees were not actually doing such work on a public holiday.

“The upshot will be extra costs foisted on employers, both in terms of money and significantly, in terms of time spent on complicated calculations.

“Also of significant concern is the overturning of another Appeal Court decision that says in 7-day week industries agreement can be reached so that only one period of holidays, where they fall on the weekend over Christmas and New Year, need be accounted for. The Holidays Bill as reported back would double the liability in 7-day week industries where Christmas or New Year holidays fall on a Saturday and/or Sunday.

“The requirement to pay rate and a half for all time worked on a public holiday will be another significant concern for employers who have previously reached agreement with their employees that a salary or composite rate covers all time worked regardless of the day of the week, time of day, public holiday or not.

“Many employers will be wondering what sort of evidence they will need to provide to support the requirement to show that the agreement had been “genuinely negotiated” into the employee’s regular pay, given many such practices have been in place for years.

“To specifically not be able to stipulate that the relevant pay of the employee already includes a component for working on a public holiday will make it difficult for employers who in good faith have paid a salary to employees so that individual calculations of hours and days worked did not have to be made,” Ms Knowles said.