Annual leave and public holidays

I think we are all looking forward to the prospect of summer and some well-deserved holidays this year.  Managing leave requests and getting your head round the requirements for public holidays can be quite tricky.

Annual leave

Certain times of the year can be very popular for leave requests, as employees try to maximise time away from work without using lots of annual leave, for example Easter and the Christmas statutory days.

An annual leave policy can help you to establish a process to request leave and help with the fair allocation of leave.  It can also help you make sure you have adequate staff to provide services over the popular leave periods. We have content, a policy template and leave request form at this link Annual holidays (healthypractice.co.nz)

Employees are not entitled to annual leave until they have completed 12 months continuous employment, but most employers allow use of leave as it accrues. It’s important for employees to take time off and in reasonable blocks, of at least two weeks at a time each year, to look after their wellbeing.

If you are considering granting leave in advance, document the agreement in writing with the employee that the overpayment will be repaid if the employee leaves before becoming entitled to the leave.

Some employees request leave without pay, generally there is no entitlement to this, and it should be considered on a case-by-case basis.

Public holidays

The Holidays Act can be difficult to interpret, and Public Holidays have their own set of peculiarities.

Every employee is entitled to 12 public holidays in each year if they fall on their usual working day.  The public holidays are specified in the Holidays Act 2003. You can also require an employee to work on a public holiday if the employee’s employment agreement allows for this, and if the day “would otherwise be a working day for the employee”. See our content on Public Holidays Public holidays (healthypractice.co.nz)

For an employee to have an entitlement to a public holiday it has to be “otherwise a working day”, that means a day that would have been a working day for the employee, but for the public holiday.

So, for a Monday-to-Friday employee, Monday would otherwise be a working day for the employee. For a rostered employee, any day on which he or she is rostered to work would, generally be a working day. This does not apply, however, to truly casual employees.

Payment for public holidays

If the public holiday falls on a day that WOULD normally be a working day for the employee:

• If the employee does NOT work, then they must be paid the relevant daily pay for that day
• If the employee does work, then they entitled to the greater of:
  • The portion of the employee’s relevant daily pay or average daily pay (less any penal rates) that relates to the time actually worked on the day plus half that amount again; or
  • The portion of the employee’s relevant daily pay that relates to the time actually worked on that day
  • The employee would also be entitled to a full day alternative holiday

If the public holiday falls on day that is NOT a usual working day, but the employee AGREES to work they will be entitled to the greater of:

• The portion of the employee’s relevant daily pay or average daily pay (less any penal rates) that relates to the time actually worked on the day plus half that amount again; or
• The portion of the employee’s relevant daily pay that relates to the time actually worked on that day

• The employee would NOT be entitled to an alternative holiday

Employees on call

Public holiday entitlements depend on the type of call-out arrangement.

If the employee:

• is called out, they’re entitled to at least time and a half for the time worked (plus a full day’s paid alternative holiday if this would have been a usual working day)
• has to limit their activities so they are unable enjoy a full holiday, e.g. the employee is required to stay at home all day but is not called out, the employee is entitled to a full days alternative holiday if they would have otherwise worked on that day.
• is on call but doesn’t have to limit activities e.g. if the employee can choose whether or not to accept the callout, then they only get an alternative holiday if they accept the call out and it would otherwise have been a working day, in this instance they would also receive at least time and a half for the time they worked.
• is on call but is not called out or chooses not to accept the call-out, but they would have otherwise worked on that day, they would be entitled to their relevant daily pay or average daily pay, for the public holiday.

This doesn’t apply to an employee who is employed only to be on call on public holidays and all employees would be entitled to any on-call/availability allowance in addition to the above.

Mondayising

This year Christmas Day, New Year’s Day fall on a Sunday and Boxing Day and 2 January fall on a Monday. If the relevant Sunday would not “otherwise be a working day for the employee”, the public holidays are transferred to the following Tuesday.

• For employees who would not otherwise work on that Sunday, the public holiday should be treated as falling on the following Tuesday.
• For employees who would otherwise work on that Sunday, the public holiday should be treated as falling on that day, and if working they might choose to take their day in lieu on the Tuesday.

Whatever the scenario each employee can only observe a public holiday once.