Entitlement:

The Holidays Act entitles all employees to paid annual holidays irrespective of whether they are full-time, part-time, temporary or casual workers. Employees are not lawfully able to agree to waive or trade-off these rights.

Permanent employees (full-time and part-time) are entitled to not less than four weeks paid annual holidays per year after they have worked continuously for the same employer for twelve months. An employee is allowed (but is not obligated) to take at least two weeks of uninterrupted holidays within 12 months of qualifying for that annual holiday.

Taking Annual Holidays:

Employers must allow permanent employees to take annual holidays when due. The time at which any annual holiday is taken must be agreed between employer and employee but the employer must not unreasonably withhold consent.

An employer may require an employee to take annual holidays if agreement cannot be reached on when the annual leave is to be taken or when the leave relates to a close down period. In either case not less than 14 days notice must be given.

If an employee does not take their holidays in a given year he or she does not lose the entitlement. Note that under the Holidays Act it is not possible to contract out of providing employees with paid holiday entitlements by allowing them to convert it to cash. The only exceptions are with casuals or where someone is owed paid holidays (such as untaken annual holidays or lieu days) but ceases their employment before they have had the opportunity to take the holidays.

Payment for Annual Holidays:

For each week of paid annual holiday, permanent employees (full-time and part-time) are entitled to the higher of their:

• Average Weekly Earnings for the 12 months immediately before the end of the last pay period before the holiday; or
• Ordinary Weekly Pay at the start of the annual holiday.

Refer to the Glossary for definitions of the above terms.

Note: To determine the employee’s ordinary weekly pay and average weekly earnings, a decision is required about whether any discretionary payments are to be excluded. A discretionary payment is defined as:

• A payment the employer is not bound, by the employee’s employment agreement to pay, but
• Does not include a payment the employer is bound, by the employee’s employment agreement to pay, even though:
  • the amount to be paid is not specified in that agreement and the employer may determine the amount to be paid, or
  • the employer is required under the employment agreement to make the payment only if certain conditions are met.

If the employee is paid in cash, then the holiday pay should be paid before the employee’s annual leave starts.

Holiday pay must not be included in the employee’s ordinary weekly or hourly rate except in the case of irregular casuals or temporary employees where the employment is on a fixed term for less than twelve months and the arrangement is expressly agreed to in writing as part of an employment agreement (in which case the holiday pay must be not less than 8% of the employees gross earnings and it must be shown as an identifiable component of the pay rate).

Genuinely casual employees with an irregular or changing work pattern are still entitled to 4 weeks annual holidays after 12 months unless the employee’s work pattern is so irregular or intermittent that it is impracticable for the employer to provide an annual holiday break, (in which case the employee should be paid holiday pay at not less than 8% in addition to the employee’s gross earnings).

In cases where casuals do qualify for an annual holiday break this should be paid for by accruing 4/52 of an hour holiday entitlement for each hour worked in the previous 12 months (in which case payment must be at the higher of the employee’s ordinary weekly pay or their average weekly earnings).

Cashing Out Annual Holidays

An employee may request to be paid out one week of his/her annual holidays subject to the following:

• The request must be in writing.
• The maximum amount to be paid out per year is one week (the request could be made in single days). In this context “year” means the period of 12 months from the anniversary of the employee’s start date.
• If the employee makes a request the employer must respond in writing within a reasonable time frame.
• The employer may decline the request without giving reasons.
• If a payment is made it must be calculated in the normal manner and made as soon as practicable.
• The employer may not make such an arrangement a condition of employment or raise it in negotiations about terms and conditions of employment.
• The employer may have a policy preventing cashing out of leave.

Close Down Periods:

If an employer shuts down for Christmas or the end of the season, employees who started their employment less than a year previously should be paid holiday pay of 8% of their gross earnings. Their next year for holiday purposes will begin from the shut-down date. Unless otherwise agreed with the employee(s) concerned an employer can have only one closedown in any 12 month period.

Note: Any public holidays falling during a close down period are treated as public holidays not annual holidays.

Payments on Termination:

All holiday pay due to an employee should be paid to the employee at the time the employee ceases employment.

Employees who work for less than twelve months (such as “temps”) should be paid holiday pay of 8% of their total gross earnings, when their period of employment ends (unless they have already received holiday pay under a “pay as you go” arrangement).

Employees who work for more than a year and have leave owing to them for that period should be paid:

• The amount due to the employee for the completed year; plus
• 8% of the total gross earnings for the remaining part year; plus
• An additional sum for any public holidays which would have fallen within the leave period due for the completed year.

Entitlement:

Every employee is entitled to up to eleven public holidays each year on pay, provided they fall on days that would otherwise be working days for the employee.

Public holidays are in addition to annual holidays. Under the Holidays Act 2003, the recognised public holidays are:

• Christmas Day
• Boxing Day
• New Years Day
• 2nd January
• Waitangi Day
• Good Friday
• Easter Monday
• Anzac Day
• The Birthday of the reigning Sovereign
• Labour Day
• Anniversary Day

Note: where Christmas Day, Boxing Day, New Years Day and 2 January fall on a weekend there are new rules for the observance of such holidays. In essence such holidays transfer to the following Monday or Tuesday for employees who would not otherwise work on a Saturday or Sunday; and they are observed on the day they fall for employees who would normally work on a Saturday or Sunday.

Employees may be required to work on a public holiday provided the holiday falls on a day that would otherwise be a working day for that employee and the requirement to work is provided for in the relevant employment agreement.

Determining what would otherwise be a working day:

Where it is not clear “What would otherwise be a working day” the employer is required to take into account a number of factors such as the employment agreement, the employee’s work patterns and other relevant factors such as the roster, the reasonable expectations of the employer and the employee that the employee would work on the day concerned and whether, but for the day being a public holiday, the employee would have worked on the day concerned.

Transfer of Public Holidays:

By mutual agreement it is possible to transfer a whole public holiday from one day to another.  It is also possible to have a partial transfer of a public holiday, such as when an employee starts work on a day with the shift overlapping into a public holiday. In either case the rules are complex and specialist advice must be obtained.

Payment for Public Holidays:

Where an employee does not work on a public holiday they are entitled to their relevant daily pay for the holiday, provided the day would otherwise be a working day for the employee. Relevant Daily Pay means the amount of pay the employee would have received if the employee had worked on the day.

Where an employee works on a public holiday (including Waitangi Day and Anzac Day), they are entitled to be paid the higher of:

• the portion of their Relevant Daily Pay  or Average Daily Pay (less any penal rates) that relates to the time worked on the day, plus half that amount again, or
• the portion of their Relevant Daily Pay that relates to the time worked on the day

If the day would otherwise be a working day for the employee they are also entitled to a whole alternative holiday on pay at a later date.

For example, an employee called in to work for a few hours on a public holiday would get at least time and a half for the time worked plus a whole paid alternative holiday at a later date. Similarly an employee who works late on the evening before a holiday (e.g. until 12.30 am on Good Friday) would get the period of time worked on the holiday at T 1.5 (in this case 30 minutes @ T 1.5) plus another whole alternative holiday at a later date even though they only worked half an hour into the public holiday.

Sickness or Bereavement on Public Holiday:

In the case of an employee scheduled to work on a public holiday who calls in sick (or suffers a bereavement) on that day, the day is to be regarded as a sick or bereavement leave as the case may be. The employee is entitled to be paid their relevant daily pay for the day which means the employee would receive the same amount as any other employee who had the day off on the holiday, but there is no entitlement to an alternative holiday.

>Taking Alternative Holidays:

Alternative holidays should be taken by mutual agreement between the employer and the employee. Subject to the express provisions of an employment agreement, in the absence of agreement the employer can make the decision, provided the employer makes the decision on a “reasonable basis”. Not less than 14 days notice is required.

Employees who do not take an alternative holiday within 12 months of becoming entitled to it may, with the agreement of their employer, cash up their entitlement to an alternative holiday by taking payment for the day instead of the paid time off.

Employee On-Call on Public Holiday:

Employees who are “on-call” on a public holiday and who are called in to work by their employer are entitled to be paid the appropriate portion of their relevant daily pay for the time actually worked, plus half that amount again. They are also entitled to an alternative holiday on pay at a later date.

Employees who are “on call” on a public holiday but who are not called into work will only be entitled to an alternative holiday if the nature of the restriction imposed by the on call arrangement on the employee’s freedom of action is such that, for all practical purposes, the employee has not had a whole holiday. Any dispute on whether an on-call employee is entitled to an alternative holiday can be determined by a Labour Inspector from the Department of Labour. Guidelines issued by the Labour Department state as follows:

If the on-call employee is required to restrict his/her activities on the day concerned to the extent that they have not enjoyed a full holiday (e.g. if required to stay at home all day) but is not called out, then the employee is entitled to a full paid day off as an alternative holiday.

However, unless the employment agreement provides otherwise, an employee on call who is able to go to about their usual activities on the basis they are obliged to respond to a callout within say 2 hours, may not be entitled to an alternative holiday if they are not called out to perform any work on the public holiday.

Entitlement:

Sick leave is for situations where the employee, their spouse or a dependant is sick or injured.

After 6 months’ current continuous service, an employee is entitled to 5 days’ sick leave for each year thereafter.

If an employee’s employment is not continuous, they are still entitled to 5 days’ sick leave if over a period of 6 months they have worked at least an average of 10 hours a week, and no less than 1 hour in every week or no less than 40 hours in every month. In such circumstances the employee is entitled to not less than 5 days paid sick leave in the subsequent 12 months period.

Any unused sick leave may be accumulated to maximum of 20 days.

Sick leave is paid for at the employee’s Relevant Daily Pay.

Where it is not possible or practicable to determine the employee’s Relevant Daily Pay or the employee’s daily pay varies within the pay period when the holiday or leave falls, the employee’s Average Daily Pay may be used to determine the payment for sick leave.

Average Daily Pay is the employee’s gross earnings for the 52 weeks before the end of the pay period immediately before the calculation is made, divided by the number of whole or part days during which the employee earned those earnings, including any day on which the employee was on paid leave, but excluding any day on which the employee did not actually work.

Medical Certificates

An employer may require proof of illness or injury (e.g. a medical certificate obtained at the employee’s expense) if the period of sick leave claimed by the employee is for 3 or more consecutive calendar days.

For absences of less than 3 days the employer may require proof of illness or injury provided the employer promptly advises the employee of the requirement to provide the certificate and meets the employee’s reasonable costs of obtaining the medical certificate.

Entitlement:

After 6 months current continuous service an employee becomes entitled to up to 3 days bereavement leave (separate from and additional to sick leave) on the death of the employee’s:

• Spouse/partner
• Parent
• Child
• Brother/Sister
• Grandparent
• Grandchild
• Spouse/Partner’s Parent

An employee is also entitled to one day’s bereavement leave on the death of any other person where the employer accepts that the employee has suffered a bereavement, having due regard to the closeness of the association between the employee and the deceased, whether the employee has to take significant responsibility for arrangements for the ceremonies relating to the death, and any cultural responsibilities the employee has in relation to the death.

If an employee’s employment is not continuous, they are still entitled to bereavement leave if over a period of 6 months they have worked at least an average of 10 hours a week, and no less than 1 hour in every week or no less than 40 hours in every month.

Bereavement leave does not have to be taken in a single block of 3 days e.g. an employee could take 2 days at the time of the death and 1 day at the unveiling of a headstone 12 months later.

Payment for Bereavement Leave:

Bereavement leave is paid for at the employee’s Relevant Daily Pay.

Where it is not possible or practicable to determine the employee’s Relevant Daily Pay or the employee’s daily pay varies within the pay period when the holiday or leave falls, the employee’s Average Daily Pay may be used to determine the payment for bereavement leave.

Average Daily Pay is the employee’s gross earnings for the 52 weeks before the end of the pay period immediately before the calculation is made, divided by the number of whole or part days during which the employee earned those earnings, including any day on which the employee was on paid leave, but excluding any day on which the employee did not actually work.