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Holidays Bill fails to meet its objectives

Holidays Bill fails to meet its objectives

Staff re-training costs associated with the Holidays Bill will cost employers over $75 million along with many millions more in making changes to payroll software, the Employers & Manufacturers Association (Northern) told the Select Committee hearings this evening.

But the EMA's Employment Relations Manager Peter Tritt told the Committee that EMA is mainly opposed to the Bill on the two main reasons it was developed to remedy.

"The Bill fails to meet its own objectives," Mr Tritt said. "It doesn't make the present law easier to understand or comply with, and the enhancement of employees' minimum leave entitlements will increase non-wage costs of employment thereby reducing the opportunities for growth in employment.

"It is nonsense for the Bill to state it will replace the current law with a less complicated law. The present law though difficult is nonetheless understood and clear in its meaning.

"The proposed new law is just as complicated but neither understood nor clear, and until judicially interpreted, will remain so.

"The Bill's Business Compliance Statement says: 'There will be an overall reduction in compliance costs associated with the proposal due to legislation that is simplified, easier to understand and apply.'

"Staff training for payroll staff and new payroll systems are two examples where the Bill falls down badly. Re-training for payroll administrators at an average of $300 per employer would cost $77.4 million spread nationally across our 258,000 (1999) employers.

"The cost of the new payroll software required will range from upgrades of $250 to new software programmes costing up to 1200-1500 hours at $160 an hour to develop.

"The Bill's foreword asserts: 'The method for calculating annual holiday pay in the full range of circumstances is spelt out in the Bill in order to make the calculations easier to understand and apply.'

"The authors of this opinion clearly never managed a payroll. The general consensus views of those who manage them and who we have consulted extensively, is that the Bill would create complicated legislation that is harder to understand and apply.

"Comments to this effect are in a survey we conducted on the Holidays Bill of a cross section of 646 managers and chief executives representing the full range of business types and sizes.

"One survey respondent said: 'The calculation process for annual leave is unrealistic". Another said: 'The method of calculating the amount payable for annual leave appears to be a dog's breakfast - messy.' The verdict of payroll managers overall was the Bill failed to achieve administrative simplicity.

"The main concerns adding costs to employment costs from our survey were:

* Time and a half, plus a day in lieu, for working on a public


* The explicit prohibition of more than one annual closedown.

* Medical certificates being required only for absences (due to sickness or injury) for five or more consecutive calendar days.

* Unlimited bereavement leave of three days at a time for each

defined bereavement, plus a further one day entitlement in

other circumstances.

* Possible extension of annual leave by one week.

"A major survey (the New Zealand Worker Representation and

Participation Survey by the University of Auckland in association with the Department of Labour) that drew on the opinions of 1000 employees recorded very high levels of employee satisfaction in the workplace.

"One question asked: 'Managers here are understanding about employees having to meet family responsibilities' had 41.1% employees strongly in agreement with a further 47.1% agreeing.

"Evidence such as this indicates there is no need for regulation of workplaces in this regard - if it's not broken what is Government trying to fix?"

EMA provided alternative wording to remedy 14 specific recommendations.

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