Review of holiday law gets mixed response

A revision of the Holidays Act which could allow annual leave to be traded for cash has met mixed reviews.

A working group has been appointed to review the act, Labour Minister Kate Wilkinson said yesterday.

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."

The terms of reference include:

* The calculation of relevant daily pay.

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

* Transferring the observance of public holidays.

Current leave entitlements are to remain.

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 group has to submit its report by December.

Business New Zealand chief executive Phil O'Reilly welcomed the review, which he said was "well overdue".

Employers have always had problems with the legislation, especially the formula for calculating holiday pay, he said.

"Administration around the payment of 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."

Council of Trade Unions vice-president Richard Wagstaff said the option of trading holidays for cash could see workers "pressured to sell holidays".

Low-paid workers, or those with a heavy workload, were likely to feel under pressure from their employer and "will not truly have a free choice".

"We also know that holidays add to the quality of life in this country."

Mr Wagstaff said the CTU was reassured that the working group had been told not to reduce workers' entitlements under the act.

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.

"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."

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

Mr Mallard said Mr 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