Overdue attempt to fix hopeless Holidays Act

The Holidays Act 2003 introduced new ways of ensuring employees get three weeks holiday per year (increased to four weeks in 2007), and also new ways of calculating holiday and sick pay and other leave.

The intent was good, and it works well for people who keep working regular hours, but in practice it has been terrible where employees work variable hours and have changing work patterns. Abiding by the law is difficult.

The last Government tried to sort it out but gave up, putting it in the too hard basket, leaving it a basket case.

Many employers then found out that they had been calculating holiday pay wrong (forced into attempting workable approximations) and some have had to front up with a lot of money to set things sort of right.

Since then employer groups and unions seem to have accepted that their stand off was not working and a solution needed to be found.

The Government has just announced they will review the Holidays act and try and sort it out. This time they have called it a taskforce, as they have already overused the terms working group, committee, inquiry and review.

But this one is overdue and needs to come up with a practical solution.

Tripartite taskforce to review Holidays Act

A taskforce that brings business, workers and Government together has been established to recommend changes to the Holidays Act 2003, says Workplace Relations and Safety Minister Iain Lees-Galloway.

“The Holidays Act was enshrined in law to provide for minimum entitlements to annual holidays, public holidays, sick leave and bereavement leave, and protect worklife balance for workers,” says Iain Lees-Galloway.

“However, there’s been enormous change in our labour market over the past fifteen years and it’s clear we need to look at the Holidays Act with a fresh pair of eyes and ensure it is fit for modern workplaces and new working arrangements.

“We need law that provides certainty to both employers and employees so that employees receive their correct entitlements. The legislation needs to be straightforward and simple to implement, and deliver fair rest and entitlements for workers.

“With an increasing variety of work patterns and pay arrangements, the legislative requirements of the Act are proving difficult and costly for employers to apply and employees are not receiving their full entitlements.

“The time is now right to directly address the underlying issues with the Act. I’ve been approached by Business NZ and the Council of Trade Unions to help tackle this vexed and complex set of issues and I’m excited about the work we have ahead of us.

“The working group will be chaired by Gordon Anderson, a law professor at Victoria University with extensive experience in employment law, both as an academic and as a barrister. He will chair a taskforce that brings together employer, worker and government representatives.

“I expect this group to consult widely to gain a comprehensive understanding of the issues with the current legislation, and work closely with technical experts such as payroll and other business service providers to assist with the design and testing of policy options to ensure they will work well in practice. The group will report back with recommendations in mid-2019.

“The Labour Inspectorate at the Ministry of Business, Innovation and Employment (MBIE) has been working with a wide range of stakeholders to improve compliance with the Holidays Act through the co-creation of new guidance and tools. I am grateful to all those people who contributed to this work.

“Employers are obligated to remediate employees for current and historic underpayments and must be compliant with the current Act until new legislation comes into effect.

“MBIE and the Labour Inspectorate will continue to provide support and engagement on these issues to assist employers in the meantime,” says Mr Lees-Galloway.

For more information on the Holidays Act 2003 review, visit here.

Being compliant with the current act can be very difficult, because the current law just doesn’t allow anywhere near properly for variables.

Leave a comment


  1. Alan Wilkinson

     /  29th May 2018

    At last a possibly justifiable working group although you would think it was core business for MBIE and they should have been able to sort it out by now.

    • Blazer

       /  29th May 2018

      how could they be expected to work it out…they spend 1.25million a week on consultants…ffs.

      • Alan Wilkinson

         /  29th May 2018

        They seem to be a dept that knows nothing about everything?

        • Gezza

           /  29th May 2018

          National’s creature I think. Supposed to save money lumping a whole heap of agencies under one roof.


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