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Government To Cut Holiday Entitlements

Government To Cut Holiday Entitlements

The Minister of Labour’s announcement today of her intention to reduce holiday entitlements for New Zealand workers following the release of the Holidays Act review shows all her previous statements of reassurance to be a sham, CTU President Helen Kelly said today.

“By announcing today both her intention to allow the reduction of annual leave from 4 weeks minimum leave entitlement to 3 weeks minimum leave entitlement through provision for the sale of the 4th week of leave and her intention to change the calculation of annual leave (despite strong union opposition to both in the report) workers will find themselves much worse off than they are now”, said Helen Kelly.

The Review of the Holidays Act report has a number of split recommendations in it including strong recommendations from the union representatives on the group aimed at protecting leave entitlements. While the group was unanimous in agreeing to change the way leave such as sick leave was paid to a formula which would be fairer for both workers and employers there are a number of strong disagreements even in this area where, if the government follows the employer recommendations, leave entitlements including sick leave will be dramatically reduced.

Helen Kelly said that while the Minister is yet to express her view on a number of these issues, her first announcements are a worrying signal.

The calculation of holiday entitlements is a technical issue. The risk with this report is that by making changes to the formula that look like mere simplifications, actual entitlements can be dramatically reduced. For example taking the new formula proposed by the unions in the report for sick leave and applying it to annual leave (something the employer representatives recommended), annual leave entitlements are reduced for any worker who has increased their hours during the year – that is a large group of workers, many of whom will be women. Other recommendations in the report from the employers would have equally severe impacts. One for example recommends that sick leave entitlement be changed from the current 5 day entitlement to one based on hours (e.g. 40 hours per year). This looks simple enough but would reduce sick leave days to workers that work part time or longer shifts than 8 hours (as they would use more than one day’s sick leave equivalent if they were sick for more than 8 hours).

“The risk is that because this is a technical issue, the government makes changes that workers only understand when they run out of sick leave and holidays unexpectedly.”

Helen Kelly said that the CTU and its affiliates will be campaigning hard to protect all leave entitlements. Workers were promised this by the Government when it was elected, and we need to make sure they honour that.


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