Following its recent report on a survey of the Holidays Act 2003, Simpson Grierson hosted a working group session with Minister of Labour, Simon Bridges, and 15 senior legal counsel and human resources practitioners - so what were their findings?
As reported by HRM last month, the firm’s report found that over 80% of respondents did not find the Holidays Act easy to apply, with Simpson Grierson recommending two key changes:
- One formula for payment of all types of leave (instead of the current four formulas); and
- Accrual and payment of leave in hours (rather than weeks for annual leave and days for everything else).
The working group also discussed, as an alternative to an hours' based formula, reconsideration of the recommendations of the Ministerial Advisory Group on the Holidays Act in December 2009.
The Group employer representatives recommended greater flexibility by allowing the accrual and payment of all leave events in the unit that best suits the workplace, whether that is days, weeks or hours. Based on Simpson Grierson's report, only 9% of respondents favoured accrual and payment in weeks (the current method of calculation for annual leave) and 30% were in favour of days (which is the current method of calculation for all other leave events). The remaining 61% were in favour of an hours' based formula, which is not provided for in the Holidays Act. With 72% of respondents' payroll systems already calculating in hours, Simpson Grierson believes this adds an extra layer of complexity and room for error.
Participants noted that holiday pay calculations should be a silent running process and that the opportunity cost of diverting resources to holiday pay issues was high.
“We understand that Minister Bridges found the observations and experiences shared by attendees insightful and we will continue to engage with him on these issues,” said a Simpson Grierson spokesperson.
Authors of the report, Simpson Grierson partner, Phillipa Muir senior associate, Rebecca Rendle, said that a post-election review would be welcomed noting that the results of the survey show that, despite the 2011 amendments, the Holidays Act is still not a user-friendly piece of legislation that is adaptable to the many and varied work patterns, and penalties for non-compliance had doubled (to $20,000 for corporations and $10,000 for individuals).