Wendy's worker Rose Williams is "very disappointed" her union and the fast-food chain are negotiating on lieu days after she won a three-year battle on the issue.
Williams went to the Ministry of Business, Innovation and Employment with the matter after she had been working at the Hornby restaurant for a year.
Wendy's has not appealed the decision.
"We haven't received a challenge that involves Wendy's," a spokesperson said.
Unite Union national director Mike Treen said the union was consulting with Wendy's as to what formula the company should use to decide a person's entitlement to a lieu day.
Treen said the draft contract by the union and Wendy's used a 'seven out of 13-day' rule.
So, if a public holiday is on a Friday and the employee worked at least seven out of the 13 previous Friday's, then the employee would be entitled to a day in lieu.
But Williams did not agree with this arrangement and wanted to know why fast-food companies did not give lieu days like other industries.
She said it should be simple: "If you work on a public holiday you get a day in lieu."
Treen said the law did not work that way.
"I would like that interpretation but I don't think it's legal and the [Employment Relations] Authority didn't think it was a legal one either."
Treen said they were doing what they have been told to by the authority.
"The authority said you've got to make a determination in each case but here are some guidelines," he said
Wendy's, which has 23 outlets in New Zealand, was found to have breached two sections of the Holidays Act 2003.
Wendy's chief executive Danielle Lendich said the company had been using the 'three-week' rule to determine who is entitled to alternative holidays.
" ... a person who works the same day of the week as the public holiday for the three weeks prior to the public holiday and the public holiday itself is due an alternative day," she said.
Employment Relations Authority member Christine Hickey found Wendy's breached section 56 and 60 of the Holidays Act.
Section 56 says an alternative holiday must be provided to an employee who works on a public holiday if that day would otherwise have been a working day for them. Section 60 sets out how those employees should be paid for the alternative holiday.
Wendy's has been ordered to comply with the two sections, conduct a review of its restaurants and keep records of staff contacted, rosters and leave.
It has been ordered to give all past and present employees from the Hornby and Dunedin restaurants their alternative holidays, or the equivalent pay since the restaurants were opened.
Wendy's has also been ordered to do the same for all other restaurants across the country backdated to July 1, 2012.
Treen said once the union and Wendy's agreed on a method, they would go back to the MBIE to check "it meets their expectations as well".
Union members would then vote on the new system – which was expected to be put in place sometime next year.