Wilson Margaret: Holidays Bill — First Reading 
Wilson Margaret: Holidays Bill — First Reading 
[Volume:606;Page:3700] 
Hon MARGARET WILSON (Minister of Labour) 
: 
 I move  
That the Holidays Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be referred to the Transport and Industrial Relations Committee with an instruction that the committee present its final report within 6 months. All parties agree that the current Holidays Act is an extremely difficult piece of legislation to apply and to interpret. Twenty-six percent of all calls to the Employment Relations Infoline last year related to the Holidays Act. In order to inform the change clearly needed in this area an advisory group including the New Zealand Council of Trade Unions and Business New Zealand representatives provided me with two reports recommending improvements to the current Act. I commend them for their effort in reaching and attempting to reach a consensus on the issues placed before them.  
The bill before the House today draws on the recommendations of this advisory group and will enable all employees to have access to entitlements at the standard that society as a whole considers acceptable; ensure that holiday entitlements are both robust and appropriate to accommodate increased diversity in working patterns; provide a balance between the needs of employers and employees; and promote a balance between work and life.  
Areas previously left to the courts to interpret and develop have been dealt with in the bill either through the codification of case law or by providing clear legislative direction as to the provisions that should apply. That will mean that users will not have to refer to the numerous judicial decisions that supplement the current legislation.  
The bill provides the same level of entitlements to all employees regardless of their type of employment industry or sector with a special exemption for the defence force. The bill also reflects the Government’s objectives of work-life balance and health and safety in the workplace. It provides employees with rest and recreation through an entitlement to 3 weeks paid annual leave after every 12 months of continuous employment. An employer must allow an employee to take the annual holiday within 12 months after the date on which the employee’s entitlement arose. To clarify the explanatory note of the bill employees must be paid for their annual holiday in the pay that relates to the pay period in which the holiday is taken unless the employer and employee agree that it is to be paid at the beginning of the annual holiday concerned.  
I realise there is currently a debate around 4 weeks’ annual leave as proposed by the Hon Matt Robson’s member’s bill. Although 4 weeks’ leave is not the Government’s current policy that will be an issue that the select committee will be able to consider.  
The bill provides a clear process for determining the timing of annual leave. It is to be by agreement but as a last resort the employer will be able to direct the employee to take annual leave upon at least 14 days’ notice.  
The method for the calculation of annual leave entitlements has been spelt out so that it can easily apply to all employment relationships and working patterns. Consistent with the objective of paid annual leave to provide rest and recreation limits have been placed on the ability to “pay as you go”. A “pay as you go” agreement occurs where employees’ annual holiday pay is paid proportionately with their regular wages payment. The bill provides that that can only occur with the employee’s explicit agreement when the employment agreement is for a fixed term of less than 12 months and where the holiday payment is an identifiable component of the employee’s wages. 
The bill retains the current 11 public holidays per year for the common observance of days of national religious or cultural significance. If a holiday falls on a day the employee would normally work and the employee does not work the employee is entitled to that day off at his or her ordinary rate of pay. If an employee agrees to work on any of the public holidays the bill provides for an alternative paid day off if the employee would have normally worked on that day. The bill provides for consistency in employee entitlements across all public holidays addressing the current confusion around Anzac Day and Waitangi Day.  
The bill also introduced a new statutory minimum payment of a rate and a half for working on a public holiday. Where an employee’s current rate of pay already incorporates a component for a payment of a rate and a half or where one of the parties contends that it does the bill provides a method for employees and employers to settle that dispute. The employment agreement must clarify how it complies with the legislation. That must occur when the employment agreement is renegotiated or within 12 months of the Act coming into force whichever is earlier. Mediation services in the employment institutions will be able to assist parties in addressing that.  
To ensure that public holidays are flexible enough to accommodate modern working patterns the bill provides for transfer of Christmas and New Year public holidays based on the working week of the employee. The automatic transfer of those holidays under the current legislation can result in employees working on the actual days without any recognition of that.  
The bill also provides employees with separate entitlements to sick and bereavement leave so as to provide insurance when employees are unable to work because of sickness or bereavement. Employees will become entitled to that leave upon completion of 6 months’ current continuous employment. Employees will be entitled to 5 days paid sick leave per year which may be taken in relation to the sickness or injury of the employee the employee’s spouse or a person who depends on the employee for care. That entitlement may be accumulated to a maximum of 15 days and expires upon the termination of employment.  
The bill provides an employer with the ability to require proof of injury or sickness if the employee is absent from work for 5 or more consecutive calendar days. The bill provides a two-tier entitlement to bereavement leave. Three days’ bereavement leave will be available to the employee on the death of a close relative and 1 day of bereavement leave will be available on the death of any other person where the employer accepts that the employee has suffered a bereavement taking into account closeness of relationship cultural reasons and any other responsibilities the employee may have in relation to his or her bereavement.  
The bill provides for appropriate remedies when its provisions are breached; remedies that are consistent with other employment-related legislation. The current penalties are increased to a maximum of $5000 for an individual and $10000 for a company or corporation which are consistent with those under the Employment Relations Act. The bill does not contain any provision for penalties for continuing offences.  
As I outlined earlier an emphasis of this bill is to clarify an ease of interpretation application which will significantly reduce the need for enforcement action. Overall I expect the benefits of the bill such as productivity increases associated with a more balanced and effective working environment to outweigh any cost to employers associated with the changes to the holidays legislation. Employers employees and practitioners will benefit from a bill that is clearer easier to understand and that applies to all employment arrangements and working patterns. The Holidays Bill recognises the relationship and balance between work and the demands of life outside employment by providing holiday entitlements at a socially accepted level. It represents a step forward for our society in recognition of the needs of a modern workforce. I commend the bill to the House.