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Public holidays and rostered employees: would they "otherwise be working"?

December 13, 2017

Contacts

Partners Phillipa Muir, John Rooney, Shan Wilson, Samantha Turner

Employment (inc Employment Relations Amendment Bill) Holidays Act

As employers will be aware, employees who work on a public holiday that would “otherwise be a working day” for them, are entitled to be paid time and a half and receive another day’s leave (section 56 of the Holidays Act 2003 (Act)).

While this is a straight forward assessment for employees who work 9 to 5, Monday to Friday, it is often difficult to assess what would “otherwise be a working day” for employees who work variable shift patterns.

The Employment Relations Authority (Authority) has just released the first decision on whether rostered staff would “otherwise be working” on a public holiday (Wendco NZ Ltd v Labour Inspector of MBIE [2017] NZERA Christchurch 199). This decision could have significant ramifications for many employers.

The Authority's decision

Wendco is in the fast food sector. It had been determining what were “otherwise working days” for rostered staff, by applying a formula that assessed whether an employee had worked on that day for 75% of the time over the previous three weeks. An MBIE Labour Inspector challenged this approach and claimed that the assessment should be based on the previous 12 months.

The Authority considered that three weeks was too short an assessment period, but 12 months was too long. The Authority found that the period for the assessment should be “at least three months” and up to six months.

In relation to the appropriate percentage to be applied, the Authority stated that a “one size fits all answer” cannot be given, but that “for some employees the answer may be that it is clear that they worked more than 50% of the same day of the week in the preceding three to six months and so should be entitled to an alternative holiday.”

A key message from the Authority was that the assessment approach needs to be tailored to each individual employee, rather than having a blanket rule apply to everyone. Each employee must be considered on a case by case basis taking into account all of the factors in section 12(3) of the Act: the relevant employment agreement, availability provisions (if applicable), rosters and work patterns.

The Authority acknowledged that this approach was a more time consuming and expensive exercise, but it stated that “An individual employee approach is simply part of the price Wendco pays for the benefit of the convenience it gains from using variable rosters.”

What this means for employers

This is the first case on this issue. It is particularly pertinent in the lead up to Christmas, with four public holidays in the next month. While this decision is at Authority level (and there are not yet any Employment Court cases on this point), employers would be wise to take it into account moving forward - particularly as there could be significant implications for payroll and compliance costs.

If you are unsure of what this means for you and your business, or if you would like other advice on the Act, please contact us. 

Contributors rachael.judge@simpsongrierson.com,matt.harrop@simpsongrierson.com