Important changes have been made to the Holidays Acts 2003.
From the 1st April 2007 on a gradual basis all employees who currently receive less than 4 weeks annual holidays will be entitled to 4 weeks.
From 1st April 2007 the Act is amended to read:
‘After the end of each completed 12 months of continuos employment an employee is entitled to not less than 4 weeks paid annual leave’.
This means that employees whose anniversary date of employment is the 2nd April 2007 then he /she shall be entitled to 4 weeks annual leave as at 2nd April 2007.
However, if an employee’s anniversary is 31st March 2007 they do not become eligible for 4 weeks annual leave until 31st March 2008.
Is this fair and was it intended by the legislation? The apparent answer to this is Yes.
The reporting back of the Bill from select committee clearly identified that not everybody would get 4 weeks annual leave as at 1st April 2007.
However, the whole matter raises issues. They are:
- Employers need to commence accruing the cost progressively, by employee, from the 1st April 2006.
- Collective Employment Agreements will need to be checked to ensure compliance with the Act if the company has a traditional shut down.
Further what about the people who are already on 4 weeks annual leave? They are not entitled to 5 weeks leave as many think they are.
The Holidays Act was amended and revised in 2003 to supposedly clarify and simplify the rules pertaining to Holidays. Like most redrafting of legislation it has resolved some matters but created new issues.
The disparity of up to 12 months does not appear fair in regard to when an employee is entitled to 4 weeks annual leave but it is, as the law has been written.
Should any client require further advice on this issue please contact us on info@taurusnz.co.nz or Dick Knapp at our office.
