Wilkinson Kate: Holidays Amendment Bill — Third Reading 
Wilkinson Kate: Holidays Amendment Bill — Third Reading 
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Hon KATE WILKINSON (Minister of Labour) 
: 
 I move  
That the Holidays Amendment Bill be now read a third time 
. It gives me great satisfaction to support the Holidays Amendment Bill at its third reading and again I would like to thank my colleagues the select committee and the officials for their work on this bill. This Holidays Amendment Bill reduces compliance costs for employers and clarifies the law by making it simpler to understand and implement. The Holidays Act is difficult legislation and it has caused significant frustration for both employers and employees. Last year I established a working-group made up of union and business representatives to review the law and recommend practical changes. It looked at a number of issues including the transfer of public holidays questions around sick leave and allowing employees to trade 1 week of leave for cash. In particular this group focused on addressing difficulties with relevant daily pay the calculation of payment for public holidays alternative holidays sick leave and bereavement leave. 
The current equation has been a burden on businesses where employees work variable hours and as such their pay can fluctuate from week to week. It has taken an inordinate amount of time and effort for many small businesses to comply. This Government wants small businesses to have confidence in our employment framework and to invest their energies in growing their operations. We do not want employers getting frustrated and wasting their time trying to figure out how to comply with complex formulae in complex legislation. As a result the working-group has drawn up a new concept called average daily pay. This change will make the Holidays Act easier to understand for those who work variable hours. When relevant daily pay is not possible or practical to calculate the employer may use average daily pay. This payment for leave is based on past identifiable earnings over the previous 52 weeks or whatever period the employee has been employed. This addresses the issue of potential fluctuations in pay. Both employees and employers will have greater certainty around what leave payments will be. This is an important change. It will give employers greater clarity and significantly reduce their compliance costs under the Act. 
The bill also allows greater choice and flexibility for employees with regard to cashing up annual holidays and the transfer of public holidays. Giving employees the choice to exchange up to 1 week’s leave for cash was signalled in the National Party’s manifesto prior to the election. If an employee has 6 weeks of leave stored up then he or she may well want to cash in one of those weeks where the employer agrees to it. Many employees do not use their full allocation of leave in a year and it is entirely at their discretion whether they wish to make this trade. It is abundantly clear that only the employee can make this request. If an employer does that he or she is in breach of the Act. This policy is about giving New Zealanders greater choice and flexibility. It is incredibly popular and I am sure the public is very much looking forward to utilising it. 
This bill also simplifies rules in other areas of the Holidays Act and addresses concerns that current arrangements are having a negative impact on business operations and productivity. This includes clarifying the law to allow employers to request proof of sickness or injury within 3 consecutive days of an employee taking sick leave without first having reasonable grounds to believe that the sick leave is not genuine. The current law is open to interpretation and employers have noted that they simply do not know at what point they have reasonable grounds. This change will make the law clear and simple. The reality is that this law will be used only very sparingly. Employers have to pay for the proof and it is clear that they will request a medical certificate only when they genuinely suspect someone of routinely pulling sickies. Employers also value good relationships with their staff so to abuse this provision will harm only themselves. 
This bill also provides more choice for employers and employees by restoring the right to transfer the observance of public holidays to another working day. This law change recognises that it may better suit some workplaces and employees to agree to observe public holidays on other days. Again this is about choice. Where it works for both parties they will now have the ability to agree to the transfer; for example an employee may agree with their employer that they can observe their regional anniversary on another working day that holds religious or cultural significance for the employee. All New Zealanders remain entitled to the 11 public holidays we observe and most employees will take those holidays as they always have. 
A provision to take effect this December clarifies employees’ entitlements during a customary close-down period such as Christmas. It makes it clear that employees are entitled to be paid for public holidays alternative holidays sick leave and bereavement leave falling during a customary close-down period if they would otherwise be working days for the employees. This does not change current practice but is in response to a recent Employment Court decision and ensures the legislation reflects the original policy intent. 
Lastly we are increasing the maximum penalties under the Holidays Act. Maximum penalties for non-compliance with the Act will double to $10000 for individuals and to $20000 for companies and other bodies corporate. There is no reason why employers cannot meet their obligations under this Act and the current penalties are too weak. Breaches of minimum entitlements are not conducive to good commercial practices and it is important that the law is taken seriously. 
In conclusion I say that this bill responds to concerns raised by the public and utilises the experience of the working-group. It retains the integrity of the Holidays Act maintaining employees’ holiday and leave entitlements whilst also promoting greater flexibility and clarity in key areas. It will be less of a burden on business while also giving greater choice to employees who may want more flexibility around how they take their annual holidays and public holidays. I commend this bill to the House.