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Proposals for a New Holidays Act

1 February 2002

Media Statement

Proposals for a New Holidays Act

Labour Minister Hon Margaret Wilson said today that the Government is proposing key changes to holidays legislation after a report on the current legislation from a joint union-employer advisory group indicated a need for a clearer legislative framework.

The Government’s proposals aim to simplify what has been a complex and difficult area of employment law.

They contain major proposals including the requirement that all employees who agree to work on any of the 11 statutory public holidays receive payment at the rate of time and a half for their work, as well as a day in lieu.

“The objectives of public holidays are to provide for the common observance of days of national, religious or cultural significance,” Margaret Wilson said.

The new legislation introduced to Parliament would retain the current provision for three weeks annual leave. The Alliance would be free to move an amendment to the legislation providing for four weeks annual leave.

Under the current proposals the ability for annual leave entitlements to be provided on a “pay as you go” basis will be applied to employment agreements of less than 12 months, where the employee has specifically agreed to such a provision and the holiday pay is clearly identified in the wages.

“Special leave” entitlements have also been strengthened in order to provide support when employees are unable to work because they are sick, someone who depends upon them is sick, or they have suffered a bereavement. There would be separate entitlements for sick and domestic leave and bereavement leave.

It is proposed there would be provision for five days sick and domestic leave which may be accumulated to a maximum of 15 days. There will be a two tiered entitlement to bereavement leave of three days for a close relative and of one day where the employer accepts that the employee has suffered a bereavement.

“Measures such as removing the separate framework for factories and undertakings, and providing that payment and day in lieu entitlements for all statutory holidays will be treated in the same way, would give greater certainty in the legislation,” Margaret Wilson said.

It is proposed that breaches of the new legislation would incur increased maximum penalties of $5,000 for an individual and $10,000 for a company or corporation, with the maximum penalty for a continuing offence increasing to $1,000 for every day that the offence continued.

Margaret Wilson is inviting Business New Zealand and the Council of Trade Unions, both members of the joint union-employer advisory group, to meet with Department of Labour officials in order to discuss the detail of the new Act.

Margaret Wilson said that “While I am pleased the key issues have been agreed on, there are still technical issues to be worked through. It is important in an area as complex as this, that both the Council of Trade Unions and Business New Zealand are involved throughout the preparation of the draft legislation”.

ENDS

The key objectives of the new Holidays Act are for:

- annual holidays to provide paid time off to employees for rest and recreation;

- public holidays to provide for the common observance of days of national, religious or cultural significance; and

- special leave to provide “insurance” when employees are unable to work because they, or someone in their immediate family, is sick or injured, or they have suffered a bereavement.

The Government has made key decisions around each of these objectives:

Annual Holidays

1. 3 weeks annual holidays upon the completion of 12 months continuous employment (NB: the Alliance intends to move an amendment that this entitlement be 4 weeks)

2. at least 2 weeks of an employee’s annual holidays should be taken in one uninterrupted period

3. the entitlement to annual holidays remains in force until they are taken and the onus should remain on the employer to ensure that an employee takes annual holidays

4. in the first instance, timing of annual holidays should be by agreement between an employer and an employee

5. to continue the current provisions that allow an employer to closedown its business and require employees to take annual holidays at that time, but only for one closedown a year

6. the calculation of annual holiday pay should be simplified

7. “pay as you go” annual holiday pay (where an employee receives a payment for annual holiday pay with each salary or wages payment) should only be permitted where the employee’s employment agreement is for a period of less than 12 months and the employee has agreed to this in writing, and where the holiday pay is an identifiable component of the wages

Public Holidays

1. all employees should continue to get 11 public holidays if they are days they normally work

2. all employees should be paid rate and a half for working on a public holiday (an employment agreement cannot provide for a lower rate of pay), as well as a day in lieu

3. the separate provisions for rate of pay for working on a public holiday in factories and undertakings should be removed

4. an employee cannot be compelled to work on a public holiday unless it is a term of their employment agreement

5. payment and day in lieu entitlements for Waitangi and ANZAC Days should be consistent with the other public holidays

6. where Christmas and New Year public holidays fall on or over a weekend, they should be transferred based on the working week of the employee (i.e. transferred for employees who do not normally work on the weekend, and observed where they fall for employees who do normally work on the weekend)

Special Leave

1. special leave should be split into two separate entitlements, one to sick and domestic leave, and the other to bereavement leave

2. an employee should be entitled to all types of special leave upon the completion of 6 months continuous employment

3. the entitlement to sick and domestic leave should be 5 days per year and may be accumulated to a maximum of 15 days

4. the entitlement to bereavement leave applies per bereavement and should be a two-tiered entitlement of:

- 3 days upon the death of an employee’s spouse/partner, parent, child, sibling, grandparent, grandchild or spouse/partner’s parent; and

- 1 day on any other occasion where the employer accepts the employee has suffered a bereavement and taking into account cultural requirements

Enforcement

1. the current level of penalties should be increased to a maximum of $5,000 for an individual and $10,000 for a company or corporation

2. the penalty for a continuing offence should be increased to a maximum of $1,000 for every day that the offence continues


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