Wilkinson Kate: Holidays Amendment Bill — Second Reading In Committee Speaker Recalled In Committee 
Wilkinson Kate: Holidays Amendment Bill — Second Reading In Committee Speaker Recalled In Committee 
[Volume:668;Page:15456] 
Hon KATE WILKINSON (Minister of Labour) 
: 
 I move  
That the Holidays Amendment Bill be now read a second time 
. I thank the members of the Transport and Industrial Relations Committee and its chair David Bennett for dealing with this bill so efficiently and effectively. The select committee reported back to the House on 2 November 2010 and recommended that the bill proceed with some amendments. I approve of the amendments proposed by the select committee. 
This bill follows the review of the Holidays Act by a ministerial advisory group of employer and union representatives that was set up last year. It forms part of our plank of employment law reforms that will improve our employment framework. The Holidays Act affects all employers and employees. It is a significant piece of legislation. However parts of the Holidays Act have been criticised as being unclear overly complex and lacking choice for both employers and employees. A lack of clarity in holiday provisions has a negative impact on employment relationships and productivity because employers and employees have to spend time and resources trying to establish their rights and obligations. 
This Government is focused on what works. Prescriptive laws cannot account for the variable hours and jobs we work or the multicultural workplaces in this country. There has to be flexibility and there has to be greater choice. That is what we intend to deliver. 
The changes contained in this bill have been widely debated. Allowing employees the option of trading their fourth week of leave for cash is an incredibly popular policy and it has widespread support. The bill delivers on a promise made prior to this Government’s election to office in 2008. I am confident that the changes will improve the overall operation and efficiency of the Holidays Act. It will improve the balance of fairness and provide greater choice to employees and employers. The changes will make it easier for employers and employees to understand and comply with holiday legislation. The main changes proposed addressed the application and calculation of payment for public holidays alternative holidays sick leave and bereavement leave and they give employees the ability to exchange up to 1 week’s annual holiday a year for pay should they wish to. 
The issue of relevant daily pay has proved to be the most difficult and frustrating part of the Holidays Act. The bill will address this issue and I know the select committee has worked hard to ensure that the new formula for average daily pay will improve the current situation. This change will make the Holidays Act easier to understand for those who work variable hours. When relevant daily pay is neither possible nor 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 thereby addressing the issue of potential fluctuations in pay. Both employees and employers will have greater certainty as to what leave payments will be. 
The select committee has thoroughly reviewed all the issues that have been raised by submitters and has recommended some sensible amendments to the bill. The committee has recommended clarifying the definition of discretionary payments. I understand that some submitters were concerned that the proposed definition for discretionary payments would increase confusion and uncertainty. The committee has recommended clarifying that a discretionary payment does not include a payment where the amount to be paid is variable but the payment itself is provided for in the employment agreement. This recommendation ensures that a discretionary payment is a payment that an employer may choose to pay an employee but is not bound to pay under the employer’s employment agreement. This ensures that the definition will be applied correctly and that discretionary payments will be excluded from gross earnings. 
The committee has also recommended deleting the terms “informed” and “voluntary” from the bill. I understand that some submitters were concerned that the term “informed” could create unnecessary confusion and increase litigation. Specifying that a request to cash up annual holidays or an agreement to transfer a public holiday must be informed and voluntary may bring into question whether all other requests and agreements under the Holidays Act and other employment legislation have a lesser requirement. That is not the intention of the bill. Further the terms raise questions as to the extent of a party’s obligation to inform the other or ensure that the other is informed before a request is made or an agreement entered into. 
The change recognises that this may create a greater duty in relation to cashing up and transferring holidays than other terms and conditions of employment. It provides certainty and clarifies parties’ obligations in these circumstances. It remains clear that only an employee can initiate a discussion regarding cashing up annual holidays and the transfer of public holidays. It is the employees’ decision to make and this is a provision that they have welcomed. 
The committee has also recommended a small change relating to proof of sickness or injury. The change aligns the reference to “medical practitioner” in the Holidays Act 2003 with the definition of “medical practitioner” in the Health Practitioners Competence Assurance Act 2003. Currently the Holidays Act refers to a medical practitioner within the meaning of the Medical Practitioners Act 1995 but that 1995 Act has been replaced by the Health Practitioners Competence Assurance Act 2003. 
These are all sensible changes and I thank the committee for the thorough consideration it has given to the bill. I would also like to thank the hundreds of submitters who took the time to make a submission on the Holidays Amendment Bill. 
The bill retains the overall integrity of the Holidays Act 2003 and maintains employees’ holiday and leave entitlements. The bill clarifies areas of uncertainty and addresses concerns about how certain aspects of the Holidays Act are causing unnecessary costs and confusion. It gives greater choice to employees who may want more flexibility over how they take their annual holidays and public holidays. I commend this bill to the House.