Accrued leave less of issue in South

Southern employers do not seem to be faced with employees stacking up accrued leave as much as their counterparts in the north.

Some northern employers are using the holiday season to force workers to use some of their leave, which registers on their financial returns as a debt.

In the past, banks have looked at accrued leave and have made lending decisions based on the amount of liability an employer has.

As well as being an on-paper problem affecting the company's balance sheet, it can cause major problems when the employee's contract is terminated and they have to be paid, or if the staff member wants to take a lot of leave at once and cover has to be found.

Some firms, particularly big employers, require all leave to be taken every year, some will let it roll over for several years and some do not address the issue.

Human resources consultant Mercer said New Zealanders had some of the most generous holiday entitlements in the Asia Pacific region.

New Zealand, Japanese and Australian employees all had a legal entitlement to 20 days' annual leave, ahead of Hong Kong, Singapore and Vietnam on 14 days and the workers in the Philippines who got the lowest entitlement at five days a year.

New Zealanders also received 11 public holidays a year.

Otago-Southland Employers Association chief executive John Scandrett said yesterday: "The norm would be that best practice in the context, combined with common sense where employers and their employees discuss the options, do shine through in the majority of situations.

"Our health and safety training team members tell us that employers want staff to be effective and safe in the workplace.

"They see holiday breaks as being important in protecting the related desired outcomes."

With the regional manufacturing sector, there was a "reasonably wide" adoption of plant close-downs for the Christmas-new year period when employees were required to take leave at that time, Mr Scandrett said.

That either eliminated or minimised significant amounts of carry-forward leave obligations.

However, some manufacturing operations in the region, usually seasonal in nature, and many service sector organisations continued to provide unbroken activity options. It was in those situations that good management protocols needed to be adhered to, he said.

"In our experience, there are usually only small numbers of staff who, for purely personal reasons, delay taking their leave entitlement.

"Management should be monitoring such situations and fully understand the rationale behind these individual cases," Mr Scandrett said.

Business coach Marti Amos said accrued leave could cause huge problems.

It was a problem typically when companies had many employees and had not been putting money aside to cover the leave owed, he told the Herald on Sunday.

Businesses such as service stations and trades would be especially affected, particularly if staff were working statutory holidays and collecting more leave than usual.

"It can be the straw that breaks the camel's back, especially if it's [a firm] with thin margins and lots of employees."

Since last year, businesses have been able to force staff to take leave at a certain time, if attempts to negotiate a mutually agreeable solution are unsuccessful. Employees can sell one week of leave per year back to their employer.

"The employer is able to force them to take leave. How often that tool is used, and how effectively, varies," Mr Scandrett said.

Employment lawyer Michael Smyth said every business was entitled to one close-down a year but had to give staff 14 days' notice.

If they had not been employed for a year, and thus had not accumulated any leave, the legal obligation was only that they were paid for the statutory holidays. But many businesses negotiated ways to pay their staff for the period.

The limitation on only one shutdown period per year could affect businesses caught up in the Christchurch earthquake.

"They may have already used their close-down period this year," he said.

First Union secretary Robert Reid said the union had limited sympathy for people who did not want to take leave.

"We take a very strong position that holidays are there to be taken as holidays.

"Sometimes we are notified of people who have six, seven, eight or even nine weeks' unused holidays but for us that's actually not what we've struggled for. They can and should take them."