Workers get option to cash in holidays

By GRAHAME ARMSTRONG, Political Editor – Sunday Star Times

Last updated 05:00 20/12/2009

WORKERS WILL be allowed to swap one week of their holidays for cash from next year.

The government will introduce legislation early in 2010, despite opposition from unions who see it as a move to rewind the Labour government’s law change two years ago, which increased the minimum annual leave entitlement for fulltime workers from three to four weeks.

The government will also legislate to standardise the rate at which leave is calculated. There will be a single rate of pay for all leave whether annual, sick, bereavement or public.

But Labour Minister Kate Wilkinson insists that the amendments to the Holidays Act 2003 will contain plenty of safeguards to ensure that workers are not pressured into giving up their holidays.

She told the Sunday Star-Times it was important that workers took time off work and there would be no further move to allow more than one week to be cashed in.

\”People can take four weeks if they want four weeks. This is about choice for that one week of the four weeks.

\”Holidays are important, rest is important and family time is important and we recognise that. We think one week is about the right balance.\”

Wilkinson said that as a safeguard, cashing in of leave could not be negotiated at job interviews unless the worker initiated the discussion. Those workers on contracts who get five weeks or more annual leave could cash in only one week a year.

Wilkinson said an overhaul of the act would also give workers and bosses the option – if both parties agree – to take a public holiday on an alternative day.

The Holidays Act review, which began in June, was conducted by a panel chaired by barrister and solicitor Peter Kiely and included business and union representatives. The panel handed its final report to Wilkinson last week. Many of the changes were part of the National Party’s election platform.

Wilkinson said the only workers who would be worse off under the changes were those who engaged in \”gaming\” the system; for example, by manipulating their work hours to maximise their pay while on leave.

Under current law, holiday payments factor in penal rates in the four weeks before the holiday. An employee could exploit that by working considerable overtime before going on leave.

The number of public holidays would remain at 11 despite a push to make Easter Sunday New Zealand’s 12th public holiday. \”We don’t see the need to increase the number of public holidays,\” Wilkinson said. \”There is a misconception that Easter Sunday is a public holiday – it is not a public holiday. For those businesses who are claiming a surcharge, thinking it is a public holiday, the public need to be aware that it is not.\”

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Wilkinson said the review was needed because the current system was so complex and confusing that even the courts had trouble determining disputes between employers and employees over rates of pay for leave.

\”We are not reducing entitlements. We think the new formula for relevant daily pay will be easier to calculate. We also think it will be fairer to employees and employers and prevent the `gaming’ of relevant daily pay calculations.\”

Helen Kelly, president of the New Zealand Council of Trade Unions and a member of the review panel, was worried the government would allow bosses to transfer days in lieu and public holidays to avoid paying double time.

Although she was happy with the proposals as they stood, she was concerned that the final legislation could go further than the report, leaving workers worse off.

\”There should be a condition [in the legislation] that the reason for transferring is not to avoid paying time-and-a-half.\”

Some workers spoken to by the Star-Times were pleased to hear of the law change, saying they would be keen to cash in their leave. Others though, would not. \”Hell no, I don’t need the money…I would rather take the break from work,\” said one.

Among the 241 submissions was a call for March 18 to become a public holiday. Wilkinson said she was \”amused\” at the suggestion but was not interested in \”legislating for behaviour that condones hangovers or the over-indulgence of alcohol\”. March 17 is St Patrick’s Day.


Allow workers to cash in one of four weeks’ leave

Allow workers to transfer public holidays (taking a public holiday on an alternative day to the day it falls)

Maintain current leave and holiday entitlements for casual employees

Maintaining 11 public holidays a year

Standard leave rate (single rate of pay for all leave whether annual, sick, bereavement or public)


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