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Holidays problems still not fixed

5 October 2004

Holidays problems still not fixed

The Holidays Amendment Bill as reported back to Parliament yesterday won't fix problems with the Holidays Act.

Business NZ Acting CEO Tim Cleary says the main problems with the Act are the cost and complexity associated with the notional calculation demanded by the 'relevant daily pay' formula - and these haven't been addressed.

He says relevant daily pay sweeps all sorts of additional payments into holiday and leave payment rates, significantly inflating leave costs for many employers. Relevant daily pay has several counterproductive outcomes:

1. The employer may not pay the employee more for working than for not working
2. Employees may earn more by not being at work
3. Employees have less incentive to produce
4. Productivity diminishes

"The fact the situation has become overly complex is highlighted by a majority on the select committee, for differing reasons, recommending that the Bill not proceed.

"Business NZ calls for an urgent comprehensive review of relevant daily pay so employers and employees can be consulted on it, as they should have been last year," Mr Cleary said.


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