Holidays Act Replacement A Relief For Business

Business Canterbury welcomes the introduction of the Employment Leave Bill to Parliament – a longawaited and muchneeded replacement for the Holidays Act, which has been overly complex and unclear for decades.

Chief Executive Leeann Watson says, “The business community will be relieved to see progress on legislation that has been under formal review since 2018.”

“Businesses will be very pleased to see this Bill enter Parliament, and congratulations must go to the Government and Minister van Velden for taking a piece of legislation that has been stuck in review for years and delivering changes that will make it clearer and more workable for both employers and employees.

“The leave calculations in the Holidays Act required an advanced calculus degree to navigate, and too often left both employees and employers unsure about the fairest way to determine entitlements.

“Payroll legislation will always need to balance ease of use with fairness and practicality, but where the Employment Leave Bill has landed is lightyears ahead of the current Act. It removes another significant layer of red tape and will help businesses focus more firmly on growth and on employing more people.

“Moving to a prorated minimum sick leave entitlement also removes an absurdity within the current law, where employees working fewer hours could receive disproportionately higher entitlements. It is not hypothetical, we regularly see situations where an employee working one or two days a week becomes entitled to five or even ten weeks of sick leave, which employers must cover to keep operating. That can come at the cost of being able to hire additional staff.

“As with the Holidays Act, the provisions in the new Bill set out minimum entitlements only. Employers will still be able to offer packages that go beyond the minimum requirements, and many already do.

“Continuity across political cycles will be important for employers. We look forward to confirmation from the Opposition that this Bill, given its twoyear implementation period, will be carried through if there is a change of Government after the 2026 Election.

“The Employment Leave Bill completes a key set of reforms the business community has long been calling for.

“This Bill finishes the trifecta of policy changes businesses asked for ahead of the last election: resource management reform, health and safety reform, and Holidays Act reform. We look forward to working with the Government on the next set of improvements that will best support businesses to grow and hire more people.”

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