Long overdue Holidays Act review announced
May 31, 2018
There has been some welcome news this week for employers, with the Government announcing that a Working Group has been set up to carry out a full review of the Holidays Act.
Holidays Act reform has long been a top priority for employers, and is an issue Simpson Grierson has been urging successive Governments to tackle for some time. The Holidays Act is something that employers and employees alike have continually struggled to interpret and apply, to the detriment of both.
The overwhelming majority of Simpson Grierson’s employer clients continue to rate this as their number one issue for reform. Simpson Grierson’s survey of employers last year found that 88% of employers wanted the Government to change and simplify the Holidays Act.
Simpson Grierson considers this was unsurprising due to the complex calculations the Act requires, involving up to seven different calculations to work out employee holiday pay, and also because the Holidays Act was originally drafted when the 9-to-5 Monday-to-Friday work week was ubiquitous.
The Cabinet paper outlines that the key objectives of the review will be to develop options for a clear and transparent set of rules for providing entitlements to, and payment for, holidays and leave. The paper also says that these options should be able to be readily implemented in a payroll system and applied to an increasingly diverse range of working and pay arrangements.
The Working Group is due to report back with recommendations in mid-2019 and a new regime is likely to be another two or three years away. The Government has said that the review will not consider the issue of remediation of historical underpayments of holiday and leave pay.
It is expected that the Working Group will consult widely in undertaking its review and Simpson Grierson is willing to help with any submissions that employers wish to put forward during this process.
If you are interested in finding out more information about the review, you can click on this link here.
Contacts
