New Zealand: Avoid The Holiday Blues

Last Updated: 16 January 2007
Article by Rick Hargreaves

With the holiday season fast approaching it is timely to remind ourselves of the rules relating to public and annual leave holiday entitlements for the 2006-2007 Christmas and New Year holiday period. Luckily for most employers public holiday calculations this year will not be as difficult as last year because the Christmas and New Year public holidays fall on Mondays and Tuesdays. Whereas last year Christmas and New Year day fell on Sundays. In other words there is no need to worry about Mondayisation this year.

Public holidays: what do I pay my staff?

With the four public holidays in the Christmas/New Year break occurring on Mondays and Tuesdays, staff who normally work these days should be paid their normal relevant daily pay if they take the day off.

If staff are required to work these days (and these days are their normal working days) then they are entitled to be paid the portion of their relevant daily pay that relates to the time they actually work on the public holiday plus half that amount again (time and a half). The employees will also be entitled to a paid alternative day off.

Employers should remember that even if staff only work half a day (or less) on a public holiday then they are entitled to a whole paid alternative day off in addition to the time and a half pay for the period worked on the public holiday.

Employers can require staff to work on a public holiday if both of the following applies: The public holiday falls on a day that would otherwise be a working day for those employees.

There is provision in their employment agreement that allows the employer to require the employee to work on a public holiday.

Annual holidays: some basics to remember

After completing 12 months of continuous service every employee is entitled to at least three weeks paid annual holidays. From 1 April 2007 all employees will be entitled to at least four weeks paid annual holidays.

Pay for annual holidays

Payment for annual holidays is based on the ‘greater than rule’. That is to say employees are paid the greater of their ‘ordinary weekly pay’ or their ‘average weekly earnings’ for the previous 12 months.

Employees’ right to take holidays

All employees must be allowed to take their annual holidays within 12 months of accruing the leave and they must be allowed to take at least two weeks of their annual holidays in a continuous period if they request it.

Employers’ right to insist on holidays

Employers can direct employees to use their annual leave but the employer must give the employees at least 14 days notice.

Bereavement and sick leave during annual holidays

If an employee suffers bereavement during their annual holidays the bereavement days do not count as annual holidays. Such days are paid as if the employee were working and suffered a bereavement. So the employee should get paid their relevant daily pay for those days that count as bereavement leave and be credited back the annual holiday.

If an employee is sick or bereaved before a scheduled annual holiday, employers must allow them to take this time off as sick or bereavement leave even if they would have otherwise taken it as annual holidays.

If an employee is sick during their annual holidays then it is at the employer’s discretion whether or not they allow the employee to take paid sick leave in place of annual leave.

Fixed term and casual employment

If you have employees on fixed term employment agreements of less than 12 months or on casual employment agreements you can agree that you will pay their annual holiday pay entitlement at the time of their regular pay. If you have done this then as long as you identify the holiday pay component of the wages or salary as a separate item in their pay slip you will not be obligated to pay them any additional holiday pay for their annual leave.

Annual closedowns

Employers can have one annual closedown period per year without obtaining their employees’ consent. During the closedown you can require your employees to take any annual holiday entitlement that they have or, if an employee does not have any annual holiday entitlement at the start of the closedown, to stop work during the closedown period. In either case you must give the employees at least 14 days notice of the closedown period.

If you do require an employee to stop work during the closedown period they are entitled to be paid 6% (if the employee is entitled to three weeks annual leave) of their gross earnings less any annual holiday leave taken or paid in advance that year.

Alternatively, before the closedown starts you can agree with any employees who do not have an entitlement to paid holidays that they will take the closedown period off as annual holidays paid in advance.

Conclusion

The 2006-2007 Christmas and New Year period should prove to be less of a challenge to employers than those years where there is Mondayisation.

Phillips Fox has changed its name to DLA Phillips Fox because the firm entered into an exclusive alliance with DLA Piper, one of the largest legal services organisations in the world. We will retain our offices in every major commercial centre in Australia and New Zealand, with no operational change to your relationship with the firm. DLA Phillips Fox can now take your business one step further − by connecting you to a global network of legal experience, talent and knowledge.

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.

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