To take the holiday or the cash?

Labour Minister Kate Wilkinson has called for public submissions on the Holidays Act 2003. Both the Otago-Southland Employers Association and the Otago Chamber of Commerce will make submissions on behalf of members. Business editor Dene Mackenzie backgrounds the review.

Battle lines are already being drawn as submissions on a review of the Holidays Act 2003 start to trickle in.

The most likely area of dissent will be on whether or not an employer and employee can agree to trade in the fourth week of an employee's leave for cash.

As the law now stands, every full-time employee is entitled to four weeks of annual leave, increased from three weeks by the previous Labour-led government.

Nobody is allowed to cash in the extra week because the former government decided that workers needed more rest and recreation.

However, Otago Chamber of Commerce chief executive John Christie is sure that employees and employers in the South already reach private agreements to cash up a week here and there to try and keep the holiday entitlements for small companies at a manageable level.

Holidays above the four-week entitlement can be cashed in with agreement.

Mr Christie said cashing up holidays needed to be considered in terms of the intended purpose of the four-week provision.

Many employees who agreed with business owners in cashing up the fourth week - or any other week - were enacting what those who opposed the introduction said, that it was essentially giving workers a compulsory wage or salary increase.

Maritime Union spokesman Victor Billot, of Dunedin, said the union's main concern was around the "cash up" suggestion for the fourth week.

"This, of course, will be bad because it will mean that vulnerable and low-paid workers could be effectively forced to give up their holidays.

"The next stage will then be rolled out when it will be suggested that workers can cash up their third or second week of holidays."

Otago-Southland Employers Association chief executive John Scandrett said the complexity of the Act and how it applied in different ways to members meant the review was an important issue for the association.

A website link would be established soon for association members to offer their views on the review of the Act to ensure that the association's submission was presented in the most effective way.

For the association, and the chamber, the main issue was the calculation of relevant daily pay.

Mr Scandrett said that while his members seemed to understand the complexity of the calculation, it was difficult for businesses to work out in advance the costs of any event.

"We need one method that is easily understandable and workable. When you are dealing with casual employees, as many members in Central Otago do with horticulture and viticulture workers, you need certainty."

On the cashing up of holidays, Mr Scandrett said it was not a critical issue for his members, although he acknowledged that many larger organisations faced a huge financial liability of untaken leave on their balance sheets.

Mr Christie said calculating the relevant daily pay was not such a large issue for companies big enough to use a third party for their payroll work.

However, most of his members had fewer than 10 employees and that meant either the owner, or usually another family member, doing the payroll.

"They want to get the calculation right but I suspect a lot of the calculations won't be correct."

The whole Act was complex for businesses and employees alike and had increased compliance and direct costs for business, he said.

Any amendments to the Act should consider what was "actually happening".

"We understand business owners and employees are currently making their own arrangements outside the legislation to suit their own personal situation, such as transferring of public holidays."

Most employers and employees wanted a degree of flexibility to suit the need of their businesses and the industry sector in which they operated, Mr Christie said.

Mr Billot said there had been suggestions statutory holidays could be moved around.

"This would lead to all sorts of problems and it is strange that employers are suggesting this when they are continually complaining about compliance difficulties. The union stance is that, internationally, most developed nations are moving towards having more holidays and this is good."

Mr Christie hoped the "emotional debate" over the swapping of religious holidays did not overshadow the debate needed over other aspects of the Act's review.

Mr Scandrett said there needed to be a protection of holidays but he would like to see the transfer of them addressed on a case-by-case basis and by agreement.

There was no flexibility now, he said.

Dunedin South MP Clare Curran said the review was a farce.

"The Government has already decided what it wants to do. Calling it a review is ridiculous."

She and Labour Party labour spokesman Trevor Mallard on Friday would be discussing the review with trade union members in Dunedin.

At the top of their list would be any changes to the relevant daily pay calculations.

Ms Curran understood that shift workers, in particular, faced a pay cut if they were forced to take sick leave on ordinary time payments rather than having their allowances calculated into the sick leave.

"That is a disincentive to taking sick leave, not a healthy thing for the workforce. We see all of these measures as an attack on ordinary working people."

Add a Comment


Our journalists are your neighbours

We are the South's eyes and ears in crucial council meetings, at court hearings, on the sidelines of sporting events and on the frontline of breaking news.

As our region faces uncharted waters in the wake of a global pandemic, Otago Daily Times continues to bring you local stories that matter.

We employ local journalists and photographers to tell your stories, as other outlets cut local coverage in favour of stories told out of Auckland, Wellington and Christchurch.

You can help us continue to bring you local news you can trust by becoming a supporter.

Become a Supporter