The Holidays Act

Last updated: January 27, 2021

Employment Relations

The Holidays Act

Published: January 27, 2021

Stage: Almost completed

Priority: Medium

Issue for Business: From around 2014 it became apparent that many employers were not applying the Holidays Act correctly when calculating Holiday Pay. Arrears in many cases totaled tens of millions of dollars. Previous reviews aimed at clarifying the current Act pointed to systemic problems. In late 2018, following a joint approach from BusinessNZ and the NZ Council of Trade Unions, the Government commissioned a full review of the Holidays Act. Whilst the Government received the recommendations of the Holidays Act review Working Group, it took no action until 2021. The Government has agreed to amend the Act in line with the recommendations of the Working Group Separately from the review, the Government has chosen to make two additional changes not supported by BusinessNZ, and outside the terms of reference of the review of the Act. These are; • increasing the minimum sick leave entitlements • introduction of a new Matariki public holiday Still further changes are imminent via a private members bill that that introduces an additional category of bereavement leave for instances where an employee has suffered a miscarriage. While these are all valid reasons for people to take leave, the creation of additional entitlements creates additional costs for employers at a time when even small increases are significant. BusinessNZ estimates that the introduction of additional sick leave and Matariki will remove approximately 8 million person days per year from national productivity.

Action: BusinessNZ submitted on the Amendment Bill

Outcome: The report of the Holidays Act Task force was released on 23 February 2021, having been accepted by Cabinet in its entirety. The Holidays (Sick Leave) Amendment Bill is currently in the Select Committee stages in Parliament, while a Bill to enact Matariki is expected later this year.

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