National change on holidays disappointing

National change on holidays disappointing

Businesses will be disappointed at National's decision to support the change to four weeks' holiday, says Business NZ Chief Executive Phil O'Reilly.

"National's change reflects political reality, but the policy won't boost productivity, and may not help employees significantly, as the cost of the increased leave is likely to forestall wage increases in the medium term.

"National's proposal to allow employees to cash up the value of the extra week is welcome as it would afford increased flexibility, allowing employers and employees to work round what might otherwise be problems caused by the Act.

"National's continued commitment to fix the problems with the Holidays Act's formula for relevant daily pay is also positive - this formula is a big issue for business, increasing costs in manufacturing and other sectors that use incentive pay, and undermining the value of productivity incentives.

"In the short term, there's a danger that those who already have four weeks' leave will seek more. Both major parties should do all they can to dampen expectations of further increases on relativity grounds, otherwise the impact on New Zealand businesses will be harder still."

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