Holiday legislation is too complicated

Businesses are still complaining about the complexities of the 2003 Holidays Act, with good reason.

The Act was well intentioned and is fine for employees with regular work patterns, but it can be horrible dealing people who have variable or changed work patterns and payments.

Attempts have been made to address the obvious shortcomings but the National led government put it in the too hard basket, ridiculous for a party that claims to support businesses.

RNZ: Holiday legislation ‘too complicated’

A survey from the law firm Simpson Grierson found nine out of 10 firms placed simplifying the Act at the top of their employment wishlist.

That doesn’t surprise me. I deal with a number of companies running payrolls and holiday payments and accruals are major causes of confusion and difficulties.

David Jenkins from the Payroll Practitioners Association said the legislation was messy, and hard for employers to get their heads around.

“The only way to be compliant with the Act is to constantly watch, monitor and change settings in your payroll system. It’s way over the top in regards to compliance.”

Employers’ main concern is how the Act calculates annual leave, public holidays, sick days, and bereavement leave.

With the rise of part-time and casual work, they say the Act makes it near-impossible to accurately figure out how much workers are owed when they take leave.

It isn’t impossible but it can be very difficult, and it can also come up with some ridiculous calculations, especially with holiday pay.

David Jenkins said there was a lack of clarity, and the legislation – which should help employers – actually hindered them.

The provision in the Act for four weeks holiday after 12 months continuous employment was straightforward for those who work the same hours every week, he said. “But as soon as I get someone that works different hours week after week, when they get to 12 months you get four weeks of…what? That’s the problem – the Act can’t help you define what a week is.”

Some employees don’t work some weeks, and work anywhere from a day to seven days a week at other times. If they take a week holiday how many days should they be paid for?

It’s worse if they take a day off, and some awards and employments allow them to take part days or hours off, and that can be diabolical trying to work out what to pay them.

It’s not just small businesses that have had problems.

Since 2012, the Labour Inspectorate has been investigating some of the country’s biggest employers to make sure they’re complying with the Act.

Of the 118 completed investigations, 37 organisations – about a third – have had to pay arrears, to the tune of at least $43 million.

Prior to that I complained to a major employer who was not calculating holidays correctly, and they had a lawyer supporting their position.

But Council of Trade Unions’ president Richard Wagstaff said it employers should figure out their obligations rather than complain the legislation was flawed.

“The big problem here is the fact that employers haven’t done enough to apply the current Act, and to quickly call for a change to that when they know they’ve been caught short doesn’t seem right to us.”

Wagstaff is either way out of touch, or is deliberately trying to play down the problems.

If calculated ‘correctly’ employees with variable work patterns can be advantaged as they get the highest of two calculations. One of those calculations is their last 4 week average pay rate.

If, for example, an employee works an average of say 10 hours a week for most of the year, then works 40 hours a week for a few weeks over Christmas, the timing of when they take holidays can make a big difference to the calculation.

The holiday pay law is definitely an ass, and this became apparent fairly quickly after it came into force in 2004. Businesses still have trouble with it, because in some situations it is unworkable.

Governments since then have ignored numerous pleas to fix it. That is a disgraceful abrogation of responsibility.

There is a reason people keep complaining about the act – in some respects it is crap.

Dotcom response and legal speculation

There’s been a lot of discussion and speculation about the reasons behind Kim Dotcom losing his lawyers and soon after having his bail conditions tightened significantly pending a hearing next week that could put him back in prison.

NZ Herald reported in Court places tough limits on Dotcom’s movements:

The new conditions are in place only until next Monday, when Dotcom will appear for a bail hearing in the Auckland District Court.

Before the issue of bail, Judge Dawson gave Dotcom’s former lawyers – Queen’s Counsel Paul Davison and firm Simpson Grierson – leave to withdraw from the case.

The restrictions follow Crown lawyer Christine Gordon yesterday making an allegation that the Herald is not permitted to publish.

Dotcom has tweeted:

I have never breached my bail conditions & my compliance is exemplary. But without lawyers representing me the Govt just couldn’t resist.

He plays the “Government is against me” card, but there could be reasons other than complying with his bail conditions.

David Farrar implies a possible connection in The Dotcom legal team:

We also might get a decision at some stage soon in the John Banks appeal, where allegedly new witnesses have contradicted the evidence given by Dotcom.

A number of lawyers regularly contribute to discussions at Kiwiblog and they and others speculate in response.

David Garrett:

This truly is fascinating (and I have no inside knowledge). The most common reason for lawyers to get leave to withdraw is when the client is refusing – or is unable – to pay his bills. All the more interesting because Davison has no necessary connection with Simpson Grierson – like me Davison is a barrister who must have an instructing solicitor (Simpson Grierson in this case), but that instructing solicitor can be anyone…literally a sole practitioner from West Auckland could instruct Davison – so long as Davison is prepared to act for the client.

I somehow doubt Dotcom is unable to pay…another reason lawyers withdraw is when they find they have unintentionally misled the court because they have been told porkies by the client…as I say, I have no inside knowledge, but the fact that BOTH the instructing solicitors – to whom Dotcom will have paid hundreds of thousands in fees – AND the barrister have withdrawn smells very strongly of rat…even more so if SG have removed all reference to their former client…like any other big firm, Simply Gruesome are usually quite happy to be identified with a high profile (civil) client whose case presents novel and difficult issues…

Dotcom’s is the biggest copyright case this country has ever seen, or probably is ever likely to see…All very odd…

NB: Nothing in my comment should be construed as an allegation of wrongdoing by Dotcom, Simpson Grierson, its partners and staff, or Paul Davison QC

And…

I think the Herald website refers to “an allegation which cannot be published”…as someone above me said, curiouser and curiouser…Lawyers withdraw from cases all the time, but it is very rare for both the barrister and the instructing solicitors to withdraw at the same time…

Logic would suggest that this withdrawal is somehow connected to the tightening of Dotcom’s bail conditions…but as you say, that is just speculation…

Nookin:

One possibility is that the lawyers’ obligations to the court have been severely compromised by some inappropriate or improper action on the part of the client such that it is no longer tenable for them to continue acting. Curious that the issue arose contemporaneously with circumstances necessitating tightening up the bail conditions.

If this has happened and publication might prejudice the outcome of the extradition proceedings, it is appropriately suppressed. I can only surmise here, bearing in mind the fact that the extradition proceedings will be heard by a judge alone. I can understand suppression on these grounds of their was a jury but this is clearly not the case.

alex Masterly:

Nookin, I think that your first sentence is pretty much bang on target.

For the sake of completeness I note the CCC rules at clause 4.2.1 define good cause for termination of a retainer as including
– instructions requiring a lawyer to breach a professional obligation,
– inability of a client to pay a fee
– the client misleading the lawyer in a material respect,
– the client failing to provide instructions in a timely way.

David Garrett:

The rules are pretty clear: lawyers must not mislead the court, and cannot allow a client to do so. …which is one of the reasons lawyers usually never ask “Did you do it?” Because if the answer is “Yes, but my defence is I didn’t”, that limits the options for counsel…for example you cannot then put the client in the witness box knowing he would lie under cross examination.

If the lawyers became aware that a client was about to commit a crime then they are obliged – I think – (cant be bothered looking up the rules) to both withdraw and inform the police..

As I say, to have BOTH the instructing solicitors and the barrister withdrawing is most unusual…A colleague has suggested to me that one reason may be they think his case is hopeless, but I don’t believe that would be a valid reason to withdraw…it will come out…

Certainly some information has been put before the court which led to his bail conditions being considerably tightened…and as I have said, it would seem to be more than a coincidence that at the same time his lawyers both withdraw…

If he has a big enough speedboat he could get to Australia…or even further if he refuelled on some Pacific Island…

Scott1:

What sorts of things are included in “misleading in a material respect”?

David Garrett:

Scott: Oh: Things like “My total net worth is USD10 million” when in fact it’s double that; Claiming “I don’t have an account in Leichenstein” when in fact he does, and it’s got a shit load in it; claiming he wasn’t present at a crucial meeting where an illegal plan was discussed, and then a tape of the meeting comes to light establishing he was there; claiming a document is genuine when in fact it is a forgery…stuff like that.

Chris Diack:

Mr Dotcom is probably not paying his legal bills (and probably not paying many of his other bills either) That will be why SG want out. They continue to pay Paul Davidson QC and do legal work yet have probably received no payment recently. PD will stuggle to find an instructing solicitor that can back him like SG and of course they may well not get paid (so who would do it).

I doubt they were consulted over Mr Dotcom’s political donations ($4million) and so read about it in the newspapers. Would be galling if you are not being paid and being advised by the Client the money is short. More so now that it is clear that the strategy to get Parliamentary leverage did not work and has actually been detrimental to your clients interests. I suspect had SG been asked they probably would have advised against making such donations as counterproductive.

I doubt the Crown wanting to tighten the bail conditions has much to do with SG wanting out. Probably he has been breaking existing bail conditions (like using a copter). The allegation mentioned in the report is probably that the Crown has some evidence (maybe someone Mr Dotcom has spoken to or as a result of warranted surveillance) that he is considering doing a Smith. Wouldn’t be surprised if they produce a affidavit to that effect. That establishes the flight risk.

David Garrett:

Chris D: You reckon SG has been paying Davison’s bills with their own money?! I must say I find that hard to believe…but as instructing solicitors they have the responsibility of seeing that he is paid, so I suppose you might be right…

I am told Davison charges $1000 an hour for cases that he WANTS to do…if it’s something that doesn’t tickle his fancy I believe it is double that…Again, I have no inside knowledge…just scuttlebutt around the robing rooms…

Interesting fellow Davison…

We will find out more about this next Monday.