Q: We attended your update this morning. Somewhere near the end of the presentation, the guy from PWC said that if a redundancy payment is part of the employment agreement, then you need to pay the 8% holiday pay on it.
This seems to be contrary to any other information that I can find online, which says that it is excluded from the 8% calculation. I even found an article online from NZPPA that says it should be excluded.
Can you please clarify the situation around this?
A: Yes, he was correct. If it has been agreed in the employee’s employment agreement to include the payment in the 8%, then it would be part of the 8% on termination. This is an agreed term, but by default, if not an agreed term, it would not be included.