If it wasn't bad enough that next year Anzac Day and Easter Monday fall on the same day and we only get one public holiday and not the possible two, now it seems there is a risk that employees could lose an entitlement to public holidays that fall
during a closedown period (which are of course, most commonly, the Christmas and New Year holidays).
To put your mind at rest and give you the good news first, the National Government has included clarification of employee entitlements during a closedown period in its recently released Holidays Amendment Bill. If and once that becomes law, the position in respect of an employee's entitlement to public holidays falling during a closedown period will be clear.
That is: an employee is entitled to be paid for public holidays, an alternative holiday, sick leave or bereavement leave falling during a closedown period if the day would otherwise be a working day for the employee.
The purpose of providing for closedown periods in the principal Act was to enable employers to manage their businesses while balancing the employees' annual holiday entitlements. It was not intended to have the effect that all days within the closedown period could be agreed to be treated as not otherwise working days.
And why is that clarification required I hear you ask? I wasn't aware that anyone was treating a closedown period as having the effect that all days could be treated as not otherwise working days, I hear you say.
It appears the need for the clarification has arisen from the relatively recent decision of the Employment Court in a case involving the EPMU (the New Zealand Amalgamated Engineering, Printing and Manufacturing Union) and SCA Hygiene Australia Limited.
In that case the Employment Court held that public holidays falling during the closedown period in question were not 'otherwise working days' for the employees. What this means is that there was no obligation on the defendant to pay employees their relevant daily pay for those public holidays pursuant to s 49 Holidays Act 2003.
I deliberately say 'there was no obligation on the defendant' as it is not crystal clear whether this is a case which is limited to its particular facts, or whether the principle is applicable to the treatment of public holidays during all closedown periods, because several factors peculiar to SCA's operations featured quite strongly in the Court's decision.
What was particular about that case was SCA's rostering system and the terms of its collective agreement with the EPMU. Some employees were rostered on a 5 x 8 hour pattern and others on a 4 x 12 hour one. SCA customarily closed its operations for 14 days at Christmas (and had done so since at least 1993). It required its employees to take annual leave during the closedown period and, most importantly, under the collective agreement roster arrangements were suspended during the closedown period (and all employees were treated as if they worked 5 x 8 hour days).
SCA argued, and the Employment Court agreed, that none of the 14 days during the closedown period were 'otherwise working days' and, therefore, there was no requirement under the Holidays Act for SCA to pay for any public holidays that fell during that period. However, despite that, SCA had reached an agreement with its employees that they would still be paid for all 4 public holidays, but on the basis of an 8 hour day. The Court commented that in 'a very real sense' the agreement provided employees with more than the minimum entitlement under the Holidays Act.
In any event, the key point is that the National Government appears to have taken a pragmatic approach and attempted to cut off any future litigation at the pass by clarifying in the Amendment Bill that public holidays that fall during a closedown period are still intended to be treated as public holidays - that is, they are still capable of being days that would otherwise be working days, notwithstanding the closedown period.
With approximately 2 months still to go until our next public holiday (Labour Day on Monday, 25 October 2010) - I for one think it is good news that we're not about to potentially lose more public holidays. What about you?
Bridget Smith is an employment lawyer at Minter Ellison Rudd Watts
