Swain Paul: Holidays Amendment Bill — First Reading 
Swain Paul: Holidays Amendment Bill — First Reading 
[Volume:620;Page:15387] 
Hon PAUL SWAIN (Minister of Labour) 
: 
 I move  
That the Holidays Amendment Bill be now read a first time 
. At the appropriate time I intend to move that the Holidays Amendment Bill be referred to the Transport and Industrial Relations Committee that the committee report the bill by 4 October 2004 and that the committee have the authority to meet at any time while the House is sitting except during oral questions and during an evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 191 and 194(1)(b) and (c). 
The Holidays Amendment Bill sets out a number of proposed amendments to the Holidays Act. The policy behind the 2003 Act was to ensure that employees who had penal rates stripped away during the 1990s would be guaranteed an additional payment for working on a public holiday. Most New Zealanders think that is fair. The Government also wanted to introduce 4-weeks’ annual leave from April 2007 to bring us into line with our key trading partners notably Australia. Australia of course has had 4 weeks’ annual leave for about 30 years. 
 The Holidays Amendment Bill is in part a response to a review of the operation of the Holidays Act by a working-group that I convened in July 2004. The working-group was made up of representatives of public and private sector employer groups and unions and was asked to consider whether the implementation of the 2003 Act had caused any unintended consequences. The group was also asked to make suggestions on how any such unintended consequences might be addressed. I commend the working-group for its work and for the constructive approach taken by all the participants despite their varied interests. I also acknowledge the efforts of employers and unions who made submissions to the working-group. 
Following the working-group’s report it was clear that some parts of the Act were producing unintended consequences and that those needed to be addressed. It is important that the interaction between the minimum entitlements in the Act and the provisions in employment agreements do not produce double-dipping. We need to avoid situations whereby the Act’s minimum entitlements are applied on top of entitlements that are already better than those in the Act. Accordingly when an employee works on a public holiday the bill provides for the employee to be paid the greater of the employee’s relevant daily pay less any penal rates for working on the particular day plus half that amount again or the employee’s relevant daily pay. This formula will ensure that employees are fairly remunerated with a minimum entitlement of time and a half while preventing a windfall for employees who already enjoy a superior entitlement under their employment agreement. For example if an employee who is entitled to double time for working on a Sunday works on a public holiday that falls on a Sunday then he or she should not receive both the time and a half provided for by the Act and the double time provided for by the employment agreement. The proposed amendment will prevent any such double-dipping. 
The bill also addresses situations where an employer has in the past incorporated public holiday penal rates into an employee’s regular or composite pay rate. The Act currently provides for a transitional period whereby that can continue until 1 April 2005. In practice that period has proven to be insufficient to give the parties to a collective agreement time to decide on how to separate the public holiday penal rate out from the regular or composite pay rate during normal collective bargaining. The reason is that a collective agreement may well have a 3-year term and not be up for negotiation until 2006 or early 2007. The bill will extend the transitional period to enable the parties to deal with the matter during normal negotiations. 
The bill also clarifies the position for employees who are sick or bereaved on a public holiday. The bill provides that the day will be treated as an unworked public holiday rather than as sick or bereavement leave and the employee will not be entitled to payment of time and a half or to a paid day in lieu. That is an important clarification for both employers and employees. 
The bill will enable employers to better manage the taking of sick leave. This proposed amendment has arisen out of employers’ reports of an increase in the incidence of sick leave particularly on weekends and other days when penal rates apply. At present an employer may seek proof of sickness or injury if an employee has been sick or injured for 3 consecutive calendar days. The bill will entitle the employer to seek proof of sickness within the 3-day period when the employer has reasonable grounds to suspect that the sick leave is not genuine. The employer will bear the cost of the medical certificate or other proof of sickness. 
To conclude the bill retains the integrity of the 2003 Holidays Act and its emphasis on ensuring basic holiday sick and bereavement entitlements for employees. At the same time the bill makes some changes to clarify several unintended consequences and to balance better some aspects of the Act. I commend the bill to the House.