Govt in no hurry to reform Holidays Act, despite employer call

Wednesday 9th March 2016

Business New Zealand and the Payroll Practitioners' Association are calling for an urgent review of the Holidays Act, but Workplace Relations Minister Michael Woodhouse is in no hurry to act.

The call from the country's peak business lobby and payroll practitioners comes after the discovery of underpayments dating back more than a decade at the Ministry for Business, Innovation and Employment and concerns the problems with holiday pay calculation may be more widespread in both the public and private sectors.

"The current difficulty experienced by MBIE in correctly paying holiday pay is just one example of a number of problems caused by the Holidays Act," Business NZ chief executive Kirk Hope and David Jenkins for the Payroll Practitioners' Association, said in a joint statement. Both have been studying the issue in a joint working group with the Council of Trade Unions.

"The Act is too complex and does not fit with many work environments and the multiple calculations to be undertaken make it difficult for employers to understand and properly comply with," said Hope and Jenkins.

In emailed comments, Woodhouse said: "While changes to the Holidays Act is not currently on the work programme, the government is aware of concerns that it is difficult to apply to certain employment situations."

Improvements had last been made in 2009 "but it’s very difficult to further reduce the complexity of the Holidays Act without affecting people’s entitlements," he said. "I am watching the debate carefully and am interested in any proposals from the business community on how to simplify the Act."

The issue appears related mainly to the fact that there is more than one way to calculate holiday pay, but employers are obliged to pay staff at whichever calculation rate yields the highest figure. One-off events, such as bonus payments, can lead to increased holiday pay entitlements.

BusinessDesk.co.nz

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