Our thanks go to Kari Schmidt, Ana Fruean and Grace Titter for writing this article
In 2018 the Government established a Holidays Act Taskforce (the Taskforce) to suggest improvements to the Holidays Act 2003. In February the Minister for Workplace Relations released the Taskforce’s report, which makes 22 recommendations. All of these have been accepted, and the government intends to introduce draft legislation into Parliament in early 2022.
We discuss the key recommendations (and other upcoming changes) below.
Most of these recommendations are not as yet law, and some of the details could well change as the eventual draft bill goes through the parliamentary process throughout the course of next year.
The Taskforce recommended extending bereavement leave to include miscarriages. Parliament actioned this recommendation by passing the Holidays (Bereavement Leave for Miscarriage) Amendment Act 2021. Now, the unplanned end of a pregnancy by miscarriage or still-birth constitutes grounds for bereavement leave for the mother and her partner or spouse. This law came into effect on 31 March 2021.
Under the current Act, employers can pay 8% holiday pay on an as you go basis (instead of providing four weeks’ paid leave) if:
The Taskforce recommends removing the first rule – fixed term agreements will no longer be a reason for employers to pay 8%, instead of providing leave.
It also recommends improving the definition of ‘intermittent or irregular’ to provide clarity for employers and employees. It has proposed a four-part test being:
The Taskforce has also recommended that employers be required to review PAYG employees every 13 weeks to check eligibility for PAYG.
Many aspects of the Taskforce’s recommendations will be positive, both for employers and employees. However, the devil will be in the detail, and some aspects of the recommendations are likely to cause difficulties for employers. More fundamentally, we do not think the changes proposed will remove much of the inherent uncertainty that is created for employers under the current regime, especially when dealing with employees who don’t fit the normal “Monday to Friday, 9 to 5” mould.
If you have any questions about these recommendations, your holiday pay entitlements or obligations, or other employment matters, please feel free to contact:
Geoff Bevan at firstname.lastname@example.org or 027 230 6894,
Jenna Riddle at email@example.com or 027 742 1032,
Gerrad Brimble at firstname.lastname@example.org or 027 213 6864.