Sticking points sour otherwise sensible Holidays Act reforms – Editorial
Brooke van Velden, Minister for Workplace Relations and Safety, attended an event at the EMA Business Hub to announce changes to the Holidays Act in September last year. Photo / Dean Purcell
The majority of necessary changes within the Holidays Act reforms have been overshadowed by some issues that will impact some key workers the most.
The proposed Employment Leave Act would replace the current Holidays Act if it passes through Parliament. It is before the education and workforce select committee, with a report due on July 13.
Attempts at reform began under the previous Labour-led Government and were continued by Workplace Relations and Safety Minister Brooke van Velden following the 2023 election.
The need for change was clear. One of the biggest examples came from under the Government’s own umbrella – about $1.8 billion owed to 220,000 past and present Health New Zealand Te Whatu Ora staff from Holidays Act compliance errors dating back to 2010.
It is reasonable to infer that the complexity of the existing system contributed to these massive errors.
The Government’s pitch for the new legislation centres around clarity for employees and employers.
Workers will earn leave in proportion to the hours they work. This leave will be accrued from day one.
At the moment, workers are entitled to four weeks’ annual leave after 12 months of continuous employment.
Bereavement or family violence leave entitlements and sick leave can be accessed from day one under the new system, rather than the entitlement only applying after six months.
A change to “pro-rating sick leave” will be similar to annual leave under the new system, but drew criticism from the Opposition and union groups last year because of the impact on part-time workers who are currently entitled to the same lump sum sick leave as fulltime workers.
It seems fair for workers to get leave entitlements in proportion to how much work they do.
At the same time, the new system will change from using different calculations to reflect variable parts of pay, like overtime, commission and allowances.
Instead, it will use the same hourly leave pay rate for all types of leave. That would not include bonuses, commissions or variable allowances.
This is relevant for shift workers who may often work overtime or receive penal rates, such as nurses, for example.
RNZ reported last month that youth inpatient facility charge nurse Mary Becker said she would take a $2700 annual pay cut because her shift and overtime allowances would not be factored into leave payments.
The Government has tried to make it so that part-time and fulltime workers are on a comparatively fairer and clearer system. It appears those working more than typical hours are likely to lose out.
Indeed, this does not appear fair. It appears van Velden has accepted that this is the smallest price for a better system that can reduce the chance of another $1.8b set of mistakes, or worse.
The minister has alluded to this dilemma – RNZ reported van Velden saying she had tried to create a law benefiting everyone but was advised it would make things worse, so she landed on this bill.
In the absence of clear alternative measures, can she be blamed?