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Bill adds confusion to Holidays Act ruling

Dean Kilpatrick,Associate

First published in the NBR, 25 July 2008

 A bill to amend the Holidays Act 2003 has been introduced to Parliament after pilots took Air New Zealand to task in the Supreme Court for its treatment of public holidays (“Supreme Court changes shift work rules,” Feb 22).

The bill moots the transfer of public holidays for employees whose shift work spans midnight.  It proposes that when a shift spans two days, at least one of which is a public holiday, employers and employees can agree that the public holiday be transferred to one of the shifts.

The bill’s explanatory note says the change is needed after the Supreme Court ruled an employer and employee cannot agree to transfer a public holiday from a day listed in the Holidays Act to another day. 

It was intended, under the original drafting of the act, to allow flexibility for transferring a public holiday to another day (notably this was recorded in the explanatory note to the Holidays Act when it was first introduced in Parliament).

What the amendment bill doesn’t address is where an employer and employee agree to transfer a public holiday to another day entirely.

The consequence of the Supreme Court decision is that, irrespective of this agreement, an employee will still be entitled to be paid time and a half if the employee works on the actual public holiday.

For example, to date, it has been common for employers and employees to agree to transfer Waitangi Day or Anzac Day, where they have fallen on a Tuesday, to the Monday to achieve a long weekend.

Employees who have not worked the Monday have been paid as if the day was a public holiday and then worked the Tuesday as an ordinary day and not paid time and a half.

The result of the court’s ruling and the lack of any reference to this type of situation in the bill is that employers will be required to pay time and a half on the Tuesday, irrespective of the agreement.

At a practical level it is likely employers will examine the additional cost and may well not agree to transfer the public holiday.  The flow-on effect is that employees will more than likely be required to work a Monday and then have the Tuesday off (if not required to work).

Conversely, however, if employees do shift work, which starts on a Monday and that finishes on a Tuesday, employers and employees will be able to agree the shift is the public holiday.  Employers and employees could well be forgiven for asking, “what’s the difference?”
It appears the Supreme Court’s interpretation of the transfer provisions, and the failure to rectify the issue in the bill before Parliament, do not meet the original intent of the Holidays Act, at least for “convenience” sake.

Hopefully, this will be addressed in the select committee stage as the bill only addresses half the problem, given the act’s original intention.