Employers express support for the proposed reform to 'complex' Holidays Act
The New Zealand government has announced that it wants to introduce an hours-based accrual model for annual leave in a change of direction to the proposed reforms to the Holidays Act.
Workplace Relations and Safety Minister Brooke van Velden said she had asked her Cabinet officials to begin work on an hours-based accrual model for annual leave.
"While shifting to hours-based accrual may require drafting a fundamentally different Bill, I believe investing the time and effort to do this will deliver superior improvements to both employers and employees," van Velden said in a statement.
"I have tasked officials to begin work immediately on this new approach. I will be seeking Cabinet decisions in 2025."
The proposal comes after the government received feedback from its targeted consultation on the exposure draft Bill for the Holidays Act reform.
According to the minister, the feedback they received on the exposure draft bill advised that it won't solve the issues with the Holidays Act, which has been described as "so complex."
"Not only have I heard from submitters that further simplification is possible, but there were some who believed that what we put out for consultation was more complex and had higher compliance costs than the legislation we have now," van Velden said.
"I want to get this right, and I have always said that this consultation would be genuine. It has become clear that a fundamental change is required to give employers and employees the simplicity and certainty they have been calling for."
Meanwhile, business and employer groups have welcomed the new direction that the government is taking with its reforms.
Alan McDonald, head of advocacy at the Employers and Manufacturers Association, said they support the government's intention to introduce a "simplified hours-based accrual model."
"It's important we get this right. Our members have told us that the current Act makes it too complicated to calculate annual leave, public holidays, sick days, and bereavement leave. So, we applaud the minister's call for a simplified approach," McDonald said in a statement.
Katherine Rich, chief executive of Business New Zealand, said the proposed system on accrued hours for leave also reflects modern ways of working.
"Variable patterns of work are the norm in today's working world, and hours is the basis on which most leave is now administered," Rich said in a statement. "Changing the Act to reflect this is a sensible move and we applaud the Government for taking time to get it right."
The government initially unveiled its plans to reform the Holidays Act in March, which van Velden said is "so complex" that most employers had found themselves non-compliant at some point.
"It is important that any improvements to the Holidays Act provide enduring solutions that will be responsive to constantly evolving work arrangements and business needs," the minister said earlier this year.
