Annual leave and close downs

Now that we are past the shortest day, you might find that your staff are starting to plan their summer holidays.  We have had a few queries from practices that are considering closing for some of the days between the Christmas and New statutory holidays, so we look at what needs to be considered.

Annual Holidays

You and your staff will be planning their summer holidays and for some managers it will be a juggling act managing staff expectations about leave and having sufficient staff to provide services.

In general, annual holidays should be taken by agreement.  When there are popular periods for leave like around Christmas and Easter, you need to be sure that you have a fair process for dealing with leave requests and allocation.  We would recommend having a leave policy and an application process and we have sample templates at this link Annual holidays (healthypractice.co.nz)

Calculating holiday pay for permanent employees can be confusing. The rate of holiday pay must be paid at the greater of the employee’s ordinary pay or average weekly earnings over the last 12 months. Annual holidays (healthypractice.co.nz) The payment is different for employees returning from parental leave Annual holidays (healthypractice.co.nz)

Public holidays that fall during a period of annual leave are treated as public holidays if they fall on a day that would have been a usual working day for the employee, therefore those days are not taken as annual leave.

Closedown periods

We have had a few queries from practices that don’t usually closedown the days between Christmas and New Year, but this year are considering closing on the Friday after Boxing Day, as this will enable staff to have a five-day break.  As this wouldn’t be classified as an ‘annual close down’ different rules apply.

An annual closedown is exactly that – it is a period where a business closes down for the same period every year.  The rules around this are covered by the Holidays Act and in most cases the requirements will be covered by a clause in your employment agreements. This clause will detail your obligations around the notification period, what happens in terms of employees using annual holiday entitlement and what happens if they don’t have the annual leave entitlement or don’t have enough leave to cover the period.  We have content about this at Close down periods (healthypractice.co.nz)

If this is the first time you are considering having a closedown you will need to agree with your staff how this will work and what annual holidays will apply.

You can only require your employees to take annual holidays for this type of closedown if:

• You have been unable to reach agreement about when your employees will take holidays, and
• You have given your employees at least 14 days’ notice, and
• They have annual holidays they are entitled to take (not holidays in advance or accrued)

Alternatively, you may decide to pay your employees and not require them to work during this period.

If a public holiday falls during a closedown, or an employee needs to take sick leave, bereavement leave, family violence leave, or an alternative holiday, they can take the other form of leave (instead of annual holidays), as long as it is a day they would otherwise be working.

Remember you can contact the HealthyPractice team at business@mas.co.nz or 0800 800 627 during business hours for any employment or business-related questions.