Closing the Gaps – Holidays Act 2003

For help with employment matters contact Lois Flanagan (379 4383)

Are you required to work on a public holiday? Thinking of calling in sick, being paid time-and-a-half, and getting an additional holiday? Certain provisions in the Holidays Act 2003 may foil any such plan.

Parry Field Lawyers provide legal advice on a range of employment matters.

Statutory Holidays

There are 11 statutorily recognised public holidays in New Zealand. Employees are entitled to be paid for public holidays if the holiday falls on a day that would otherwise be a working day for the employee. Many people are not actually required to work on public holidays and for them the Act works well.

The Problem
If an employee does not work on a public holiday but would otherwise be required to work, the employee is still entitled to be paid at his or her "relevant daily pay rate". The Act defines how relevant daily pay is calculated. The calculation can be complicated as it may include productivity or incentive based payments (including commission); overtime payments; and the cash value of any board or lodgings provided by an employer.

Where an employee is required to work on the public holiday (where it falls on a day that is otherwise a working day and the employee's employment agreement expressly requires it) the employee must be paid at time-and-a-half for the time actually worked on the public holiday, and is also entitled to an alternative holiday.

But what if the employee is sick on that public holiday? The Act provides that after six months continuous employment, an employee is entitled to five days sick leave in a 12 month period. The employee must be paid an amount equivalent to his or her "relevant daily pay" for each day of sick leave. One interpretation was that in this situation the employee was entitled to pay at time-and-a-half for the sick day plus an alternative holiday – hence the bonanza! The Act was unclear as to whether or not this was the correct position.

The Solution
The Act clarifies this situation by stipulating that the day's leave is to be treated as an unworked public holiday (not as sick or bereavement leave) and states that an employee is not to be paid at time-and-a-half and is not entitled to an alternative holiday.

Notwithstanding these provisions, there are still outstanding issues in the finer details of the Holidays Act 2003that have the potential of involving ongoing challenges and significant cost to employers. Albeit, plans to call in sick when required to work will no longer provide a windfall for an employee.

Should you need any assistance with this, or with any other Employment matters, please contact Lois Flanagan at Parry Field Lawyers (379-4383).