EMA Conference: Managing Leave and the Holidays Act

  • Margaret Wilson

Speech Notes
EMA Conference:Managing Leave and the Holidays Act November 15, 2001


Good morning, and thank you for the opportunity to speak to you.

First I would like to talk about the review of the Holidays Act.

As you are all aware, the Holidays Act has for a long time been the subject of criticism from the public, employer and employee groups.

During the year to 30 September 2001, 45,000 (22%) enquiries to the Employment Relations Service Info-line related to holidays. In December 2000, 7,500 (41%) enquiries related to holidays.

During the same year to 30 September 2001, 1,400 (50%) complaints to the Labour Inspectorate were related to annual holidays, and 614 (22%) to public holidays.

The Government has signalled its intention to replace the Holidays Act and I established an Advisory Group to provide advice on what a new Holidays Act should look like. The Group has put a great deal of time and effort into their review of this complex piece of legislation.

The main difficulties with the Holidays Act are not just that it is difficult to understand but it does not accommodate the increasing diversity in working patterns. As a result, the Act is supplemented by an array of judicial decisions that anyone reading the legislation may not be aware of.

The recommendations and reported positions of the Advisory Group in respect of the around 50 issues that the Group identified have been aimed at remedying these difficulties with a number recommending codification of case law.

I will briefly outline the main areas the Group agreed on and others they have referred to Ministers. Obviously the Group could not resolve all the issues before it and some decisions remain to be made.

It was to be expected that on many issues employer and employee groups would not be able to reach agreement in such a forum. But the fact that agreement has not been reached in many areas does not mean that the discussions counted for nothing. Both the employer and the employee parties worked hard to clarify exactly what their position was in relation to the present environment and the proposition being put forward by the other party. This is of great help in the next stage of the process: governmental decision-making. There will be further consultation as part of that process and the introduction of legislation.

Before going on to discuss detailed issued related to the Holidays Act I should touch on another recent development in the area of leave which has nothing at all to do with holidays: that of Paid Parental Leave.

Both parties in government had clear mandates for paid parental leave, although there were different emphasises reflected in each policy. Over time we have cooperated in putting together a proposal which is to be taken through the House by my colleague the Associate Minister of Labour Laila Harré.

Paid parental leave allows women greater choice in deciding when to return to employment after the birth of a child and recognises, through a government financial contribution, the importance of child-rearing in those early weeks. The total leave available to an individual is still one year as provided in the existing law. As you’ll probably be aware, eligibility to PPL will be based on the existing Parental Leave and Employment Protection Act, which is broadly having worked for the same employer for more than one year for more than 10 hours per week. The proposed rate of payment is $325 gross per week, or 100% of income if you earn less than $325 week.

Paid Parental leave is a further step towards a modern workplace environment which will allow New Zealand to develop, attract and retain the educated and skilled staff we need in out workplaces. It is a cost-effective contribution by the government to better workplace practice and better support for children and families.

Let me now look at some of the Holidays and leave issues identified by the advisory group:

Annual Holidays

·The objective of annual holidays is to provide employees with an opportunity for rest and relaxation and the Group has agreed that an employee shall continue to become entitled to this opportunity upon the completion of 12 months employment
·In order that the objective of rest and relaxation can be achieved, and to provide for some clarity and certainty, the Group has agreed that at least 2 weeks of an employee’s annual holidays should be in one uninterrupted period
·In recognition of employers’ operational requirements, the Group has agreed that the ability of an employer to close-down its business for a short period should be continued and that employees will take their annual leave over that period
·The Group also recommended that officials undertake work in relation to the calculation of annual holiday pay, with the primary objective being to simplify the calculations without diminishing current entitlements. The Employer representatives proposed removal of the requirement to recalculate holiday pay where holidays have been taken in advance.

·The Group agreed in principle that pay as you go annual holiday pay could occur but was in disagreement over when this should be permitted. The employer position is that this should be allowed for non-permanent employees, and the union only for casual employees employed on an irregular basis with no one engagement being longer than one week.

·the Group also had different views on whether the entitlement should be for 3 or 4 weeks annual holidays

Public Holidays
·The objective of public holidays is the common observance of days that are significant for national, cultural or religious reasons.
·the Group has agreed that these days should be those that are currently observed, but an employer and employee can agree to observe alternative days
·the Group also agreed in principle that payment for a public holiday should be based on the Ports of Auckland case definition of ordinary pay where the main principle is that the pay should be that an employee would receive for an ordinary working day.
·The Group has proposed that there should be some provision for penal payments for working on a public holiday but there were differing views whether this should be provided as a minimum entitlement or one that may be varied by agreement between employers and employees. The employer position is that payment should be rate and a half, unless negatived or varied by agreement, and the union position that all employees should be paid rate and a half for working on a public holiday.

Other aspects of public holidays that the Group has referred to Ministers include
·Whether employees should be paid for public holidays if they do not normally work on the day. The Employer position is to retain the status quo, i.e. an employee receives a paid holiday if the day is an otherwise working day, and that some formula should be applied where this is unclear or arguable (for example in the case of casual employees). The union position is that all full-time employees should receive 11 paid public holidays per year, with some proportionality mechanism for less than full-time employees.
·The automatic transfer of Christmas and New Year holidays where they fall over a weekend. The employer’s preferred position is to continue with the current position. Their alternative position is that the holidays should only be transferred where the enterprise’s normal operation is confined to Monday to Friday. The union position is that the holidays should only be transferred where the employee’s working week is normally confined to Monday to Friday.
·Entitlement to a day in lieu for working on any part of a public holiday that is an otherwise working day. The difference in positions is where a shift straddles two calendar days. The employer position is that in this case the shift should belong to one day for the purposes of public holidays. The union position is that an employee should be entitled to a day in lieu for working any part of a public holiday that is an otherwise working day, based on the Lyttelton Port Company case.

Special Leave
·Special Leave provides employees with a form of insurance against sickness or bereavement
·the Group has agreed that an employee should become entitled to this after 6 months employment but had different views on the level of entitlement.
·The employer position is that there should be a single entitlement to special leave of one week, pro rated for less than full-time employees and that unused special leave should not accumulate. The union position is that there should be separate entitlements for sick/domestic leave and bereavement leave. The entitlement for sick/domestic leave being 5 days that may accumulate, and a two-tiered entitlement to bereavement leave of 3 and 1 days.

A lot of ground has been covered by the Group and I was pleased that employers and unions worked together so well.

I am hoping to take a paper to Cabinet before Christmas to get decisions on the key components of a new Holidays Act. This will be the first step as many issues are consequential to key decisions.

The work of the advisory group on Holidays shows the progress that can be made in complex areas when the government, employers and unions work together in a tripartite way. There will not always be agreement. But all parties benefit by the identification of areas of concern and the efforts made by each party to move towards the position of the other. Government decisions resulting from such a process are therefore informed by a very exact understanding of the issues as they are seen and defined by the parties. This makes it simpler to take competing issues into account, and provides a basis for a creative search for solutions by policy analysts and government itself.

The reflection on the parties different positions by the public and professionals meeting in gatherings such as this provides further understanding of complex issues and improves the final policy and legislative result.

I will be more than happy to listen to your views and to take them back with me; I am also happy to answer questions – but will be unable to leap-frog the policy process and tell you of outcomes that have not yet been decided!