Constructive work on holidays

December 20th, 2009 at 12:42 pm by David Farrar

The SST report:

WORKERS WILL be allowed to swap one week of their holidays for cash from next year.

The government will introduce legislation early in 2010, despite opposition from unions who see it as a move to rewind the Labour government’s law change two years ago, which increased the minimum annual leave entitlement for fulltime workers from three to four weeks.

This was of course election policy. It also may not mean great change for some people as if you do not take all your annual leave, and leave your job, it gets paid out to you anyway. Also it gives an employee the right to sto an employer closing the business for four weeks over summer, and forcing them to take four weeks leave then. They can now only be forced to tale three weeks leave, and get the fourth paid out as extra salary.

The government will also legislate to standardise the rate at which leave is calculated. There will be a single rate of pay for all leave whether annual, sick, bereavement or public. …

Wilkinson said the only workers who would be worse off under the changes were those who engaged in “gaming” the system; for example, by manipulating their work hours to maximise their pay while on leave.

Under current law, holiday payments factor in penal rates in the four weeks before the holiday. An employee could exploit that by working considerable overtime before going on leave.

Seems sensible, and much much easier administratively.

Wilkinson said the review was needed because the current system was so complex and confusing that even the courts had trouble determining disputes between employers and employees over rates of pay for leave.

“We are not reducing entitlements. We think the new formula for relevant daily pay will be easier to calculate. We also think it will be fairer to employees and employers and prevent the `gaming’ of relevant daily pay calculations.”

I suspect very few employers apply the law absolutely correctly because it is so difficult to understand. Most just pay leave at the normal rate anyway I suspect.

Helen Kelly, president of the New Zealand Council of Trade Unions and a member of the review panel, was worried the government would allow bosses to transfer days in lieu and to avoid paying double time.

Although she was happy with the proposals as they stood, she was concerned that the final legislation could go further than the report, leaving workers worse off.

“There should be a condition [in the legislation] that the reason for transferring is not to avoid paying time-and-a-half.”

Nice to see a constructive approach by the . They will of course be against the cashing in a weeks leave, but pleased to see not against the other changes necessarily.

Some workers spoken to by the Star-Times were pleased to hear of the law change, saying they would be keen to cash in their leave. Others though, would not. “Hell no, I don’t need the money…I would rather take the break from work,” said one.

And now they will have the choice, so both camps can be happy. Different employees have different needs. Those with kids probably love having a 4th week leave. Those without kids are more likely to love being able to earn some extra money by only taking three weeks. And there are also those in positions who find it hell to take too long a break, as the work piles up so much in their absence. So not treating all employees as wanting the same thing is good.

Among the 241 submissions was a call for March 18 to become a public holiday. Wilkinson said she was “amused” at the suggestion but was not interested in “legislating for behaviour that condones hangovers or the over-indulgence of alcohol”. March 17 is St Patrick’s Day.

Heh.

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12 Responses to “Constructive work on holidays”

  1. David in Chch (523 comments) says:

    I have suddenly been given a 5th week of annual leave. I have trouble using the 4 I have now! So this has been a long time coming, and is overdue.

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  2. Pete George (23,681 comments) says:

    Holiday pay and relevant daily pay have been difficult to understand and often difficult to implement especially for employees with variable work patterns. Any move to simplify them and give greater flexibility with how they are paid will be welcomed.

    Under current law, holiday payments factor in penal rates in the four weeks before the holiday. An employee could exploit that by working considerable overtime before going on leave.

    Only correct in some circumstances. If an employee has a standard pay then the four weeks average does not apply.

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  3. burt (8,309 comments) says:

    Poor Nanny, she will be gutted that having fought for more free time for her delightful little buttons that they might be able to use their free will and escape from Nanny’s determinism. This will not do – the unions will be outraged that workers are being given choices about how they use the benefits from their labour.

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  4. s.russell (1,646 comments) says:

    I get 5 weeks annual leave. On top of that the nature of my job means I have to work on most public holidays. The days in lieu I get amount to another two weeks. I would be very happy to trade in one of those for cash – it would help pay for having more fun in the other six. The proposed legislation is a great idea. Bring it on!

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  5. dime (10,100 comments) says:

    so the employer has no rights? if the employee wants to be paid out for a week, thats it? the company cant say no? seems harsh.

    its not an issue for me, happy to buy some holidays back. but yeah, harsh.

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  6. Murray (8,847 comments) says:

    Excellent, one more reason not to employ people.

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  7. Jeff83 (745 comments) says:

    Excellent, one more reason not to employ people.

    With your attitude I defintely would not want to be employed by you, thankfully I work for an employer who is not a cunt, and as a consequence its a constructive relationship with the law in many senses being irrelevant.

    As for selling a weeks holiday, Ill pass. Believe it or not I would rather have the time.

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  8. Pete George (23,681 comments) says:

    Jeff is right, good employers and employees don’t have problems, they work together.

    I’d rather keep the 4 weeks too, it has made a big difference to the year being able to take a bit more of a break.

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  9. lofty (1,317 comments) says:

    I presume that this is negotiable with the employer??

    It seems a little harsh that as an employer with 20 odd employees the 1 week per person (if they each decided to buy a week) would mean having to find a few 10’s of thousands to pay them out.

    Any clarification on this issue would be helpful.

    Cheers

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  10. Pete George (23,681 comments) says:

    You might have to wait and see the legislation Lofty, the news report hasn’t got much detail. It isn’t clear if the employee will have a right to ask to cash in or if it has to be only under agreement between employer and employee.

    In some cases an employee who cashes in a week may be able to recover that cost to the employee through productivity, or reducing the expense of using a replacement worker may cover it. But if the employer does not pay to replace a worker on holiday and doesn’t benefit from the extra week of work from the employee then it will add to the employer’s costs.

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  11. Jeff83 (745 comments) says:

    It seems a little harsh that as an employer with 20 odd employees the 1 week per person (if they each decided to buy a week) would mean having to find a few 10’s of thousands to pay them out.

    I think it would be unusual however for all 20 staff not to want to cash in their extra leave. Also allowing them to cash it in allows the employer to get a large burden (i.e. huge leave balances) of their books. With some staff having 10+ weeks saved up, which if exercised would cause havoc, it would often be to their benefit.

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  12. lofty (1,317 comments) says:

    I don’t disagree Jeff, but we try as much as possible to manage our staff leave entitlement to a minimum, so as to avoid the scenario you point out.

    Given that our staff work rostered 4 on 4 off shifts, coupled with time off in lieu provisions, it is quite conceivable that a goodly proportion of staff may well want the week paid, as they get quite a lot of time off anyway due to the shift pattern.

    Don’t get me wrong here, I am not moaning, I will just have to wait for more detail I guess.

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