Holidays Act review launched

A working group has been appointed to review the Holidays Act, Labour Minister Kate Wilkinson has announced today.

She said the Act had been widely criticised for its complexity and the significant compliance costs it created.

"This review is aimed at making the Act easier for businesses and employees to understand and apply, while maintaining fairness in the employment relationship."

Business NZ welcomed the appointment of the working group.

"A review is well overdue," said the lobby group's chief executive Phil O'Reilly. "Employers have had a lot of problems with this legislation ever since it came into force.

"Among other things, its formula for calculating holiday pay uses irrelevant variables and is so complex that it significantly increases payroll administration costs in many companies.

"Administration around the payment for public holidays is similarly complex and time-consuming.

"The business community has made its concerns known about the Act since 2003 and we are pleased these are finally being heard."

Terms of reference for the group include:

* The calculation of relevant daily pay;

* Trading annual leave for cash at the employee's request; and

* Transferring the observance of public holidays.

The working group has five members including two nominations each from the Council of Trade Unions and Business New Zealand.

Its chairman is Peter Kiely and members are Helen Kelly, James Ritchie, Paul Mackay and Philip Doak.

"The members appointed to the working group have significant experience in employment matters and I'm confident the recommendations they produce will go a long way to clarifying and enhancing the Act," said Wilkinson.

The group has to submit its report by December this year.

The Labour Party said workers should be "very, very afraid" of the review.

Trevor Mallard, its spokesman on labour relations, said the Government's track record was proof of that.

"We've already had the 90-day `fire at will' law, the abolition of the Department of Labour's pay and employment equity unit, confirmation ACC entitlements will be lost, and the slashing of nearly 1500 public sector jobs," he said.

"Now we have a review of the Holidays Act. Of particular concern is the proposal to consider allowing workers to cash in their annual leave."

Mallard said national had always argued that employees should be able to cash in their annual leave but had consistently ignored the fact that employees on low pay or under pressure from employers would struggle to say `no' to their bosses.

Mallard said Kiely was "a long time National Party board member and a lawyer for the party ... it is disappointing that he will chair it (the review group)."


NZPA