Good Business: The Ins and Outs of Holiday Pay in New Zealand

The Holidays Act 2003 (“Act”) can be a complicated piece of legislation. Many employers still struggle to understand what they need to pay their employees under the nearly 20-year-old Act. Below I tackle some of our commonly asked questions employers have when dealing with the Act.

How many public holidays are there in New Zealand?

There are 12 public holidays recognised in New Zealand; Christmas Day, Boxing Day, New Year’s Day, 2 January, Waitangi Day, Good Friday, Easter Monday, ANZAC Day, the birthday of the reigning Sovereign (observed on the first Monday in June), Te Rā Aro ki a Matariki/Matariki Observance Day, Labour Day (being the fourth Monday in October) and the day of the anniversary of a province or the day locally observed as that day.

(Where any of the public holidays above fall on the weekend, the Act permits the Holiday to be recognised on the following Monday.)

What happens if an employee does not work on the public holiday?

If an employee does not work on any part of the public holiday in question and they would usually work on that day, the employee is entitled to be paid their usual wage or salary for that day, being at their relevant daily pay or average daily pay (whichever is greater). The employee is not entitled to an alternative holiday.

What happens if an employee does work on the public holiday?

If an employee works on any part of the public holiday and they would usually work on that day, in addition to being paid their usual wage or salary, the employee is entitled to receive time and a half for the hours/time they actually worked on that day. On top of that, the employee is also entitled to an alternative holiday.

Note: Collective Employment Agreements (“CEA”) or Individual Employment Agreements (“IEA”) can provide for extra payment on top of the employee’s entitlement under the Act for working on a public holiday

What happens if an employee is “on-call” for any part of the public holiday?

If an employee is “on-call” for any part of a public holiday, their entitlement under the Act may change. The first hurdle is understanding if the employee being “on-call” is classified as work. Unfortunately, there is no straight forward answer. The Employment Relations Authority and the Courts have given us some guidance, to an extent.

Member Doyle in Sanderson v South Canterbury District Health Board, [2017] NZERA Christchurch 37 said at paragraph 39:

The factors to be considered when assessing what constitutes “work” were stated by the Employment Court in Idea Services Ltd v Dixon and confirmed by the Court of Appeal in Idea Services Ltd v Philip William Dixon. The three factors are:

(a) The constraints placed on the freedom an employee would otherwise have to do as she or he pleases;

(b) The nature and extent of the responsibilities placed on an employee; and

(c) The benefit to the employer of having an employee perform the role.

The Court of Appeal in Idea Services Ltd v Philip William Dixon [2011] NZCA 14 stated at paragraph 8:

“The greater the degree or extent to which each factor applied (ie the greater the constraints, the greater the responsibility, the greater the benefit to the employer), the more likely it was that the activity in question ought to be regarded as work … ”

And further at paragraph 12:

“ … that there are considerable differences between a typical on-call doctor, who is under relatively few constraints, and someone like Mr Dixon while on a sleepover. For instance, Mr Dixon, unlike an on-call doctor, is prevented from leaving his workplace and from seeing friends or family without his employer’s permission. He must be constantly available to anyone who might want to see him in his (compulsorily unlocked) room.”

What if “on-call” is classified as work?

An employee is entitled to time and half for the period that the employee is “on-call” during the public holiday. The employee is also entitled to an alternative holiday.

What if “on-call” is not classified as work?

An employee is only entitled to an alternative holiday “if the nature of the restriction imposed by the on call condition on an employee’s freedom of action is such that, for all practical purposes, an employee has not had a whole holiday.” (Section 59 of the Act). The employee must still be paid in accordance with the CEA or IEA for being “on-call”.

Note: The Employment Relations Act 2000 requires “availability provisions” to be recorded in the relevant employment agreement.

If you have any questions, please contact us for an appointment T:06 349 0090 or email mattb@horsleychristie.co.nz.

Matt Bouzaid LLB Bcom

SOLICITOR

 

Disclaimer: This publication should not be construed or acted on as legal advice. It is brief and general in nature. Specific advice should be sought.