The purpose of the Holidays Act 2003 is to promote a healthy work-life balance. One way to achieve this was by mandating minimum entitlements to annual and public holidays. But in practice, the statutory framework has long been criticised for being unwieldy and complicated, with many employers struggling to comply with their obligations under the Act.
The Government announced a review of the Act, following a request from both Business NZ and the Council of Trade Unions. The Holidays Act Taskforce reported back on October 2019, recommending a raft of changes to the Act. The recommendations are designed to give certainty and transparency to the rules providing entitlements to, and payment for, holidays and leave.
The Taskforce’s recommendations were side-lined in 2020 with the COVID-19 response. But the Government has since announced that the policy work to implement these changes is now underway, with the aim to introduce legislation to Parliament by early 2022.
We are expecting that the new legislation will include clearer rules for determining, calculating, and paying leave entitlements. The Taskforce’s recommendations have particularly focused on employees with unpredictable working patterns, as this has traditionally made the annual holiday payments particularly difficult to calculate.
You can access more information about the Taskforce’s recommendations here: https://www.beehive.govt.nz/sites/default/files/2021-02/Holidays%20Act%20Taskforce%20final%20report.pdf
But until then, the status quo remains. This means that employers and employees alike will need to continue to navigate the current Act. As the easter holiday period approaches, this is a timely reminder for employers to ensure that employees will receive their minimum entitlements under the Holidays Act 2003; and not be caught in costly remediation.
If you want some advice about the Holidays Act 2003, please get in touch with someone from our employment team as they will be happy to assist you.
