Editorial: For sale: Our summer holiday


During the coming week the beaches will be busier, the dairies selling more icecreams, than any other week of the year. The shopping malls will be full of people taking advantage of the sales - and swapping those unwanted Christmas gifts of socks, ties or talcum powder.

Tuesday, Wednesday and Thursday are not public holidays. Legally, their status is no different to the same days in the past week.

But changes to the Holidays Act, which came into force in 2007, allow every permanent employee four weeks of paid annual leave. And when these three days are tidily sandwiched between two four-day weekends ... well, you'd be mad to work them, wouldn't you? Especially when the forecasts promise fine weather.

So here's a poser, then: what if your employer was to offer to buy back five days of your annual leave? Instead of supervising the kids building sandcastles, you'd spend the week working - effectively being paid double-time.

For some, it will be a no-brainer. That double-time would help with bill payments, while clearing Yuletide's over-stretched credit card.

For most, it will be a tough choice - but it's a choice the Government will offer us, from next year.

The unions have warned that some of the most vulnerable employees - the young, the migrants, those who work longest, for least reward, and are most in need of rest - may be pressured to trade leave.

And who's to guarantee it will stop at just one week? Already, some argue that allowing workers to trade only one week is arbitrary and paternalistic.

Labour issued some garbled rhetoric about "a deceitful grab of workers' holidays entitlements", but it's apparent that the party that introduced the fourth week's leave isn't too vexed about trading it back. It's surprising Labour isn't opposing this law change more vigorously, because it epitomises one of politics' most fundamental questions: Who knows best?

Liberals will argue that individuals know what's good for them. Social democrats will argue that a government sometimes needs to protect individuals from being pushed into decisions they may regret.

The holiday changes were recommended by a Ministerial Advisory Group, including two union representative (who opposed the cash-for-holidays trade) and two employer representatives (who supported it).

What they did agree on were some critical protections, limiting the risk to vulnerable workers. Trading annual holidays cannot be included in employment agreements or salary negotiations, the report says, nor agreed in advance.

There is, however, a catch that has been entirely overlooked in public discussion of this change.

Holidays are, mercifully, one of the last things in life that the Government does not tax.

But if you trade a week's holiday for cash, that will be taxed. It could even push some people into a higher tax bracket, or reduce workers' entitlement to accommodation supplements and child tax credits.

According to one submission to the advisory group, a working parent earning $1000 gross a week might gain only $220 in the hand.

It is such hidden hooks that prompt the unions to say that the Government must step in to protect us from ourselves.

That is an over-reaction.

Instead, what the Government must do is require employers to provide workers with clear written information about the implications of trading the extra week: how much they will earn in gross, what deductions will be made, what net pay they will receive, and what effect it may have on other entitlements. That way, they can make an informed decision.

When it was introduced, the fourth week's annual leave was a nice Christmas present.

Now, that present will come with an exchange card. But the exchange card must have the terms and conditions clearly printed on the front.

- Herald on Sunday

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