There have been recent articles in New Zealand newspapers suggesting an employee is entitled to be paid time and a half if they take sick leave on a Public Holiday.

That is not correct. In this article

Payment of time and a half is provided by Section 50. We added the bold and underlines - the legislation itself is plain text.

There are two important points to keep in mind from this section

Payment for sick leave is covered by Section 71. The highlighted subsection 1 requires payment of the employee's relevant daily pay.

Relevant Daily Pay is a defined term under the Act, and is used for calculating payment for sick, bereavement, public holidays taken, and alternative holidays taken.

We have highlighted in red the clause that specifically excludes the 50% loading from these calculations.

The above three sections clearly indicate that time and a half is not paid for sick leave taken on a public holiday. Look at it this way

Sick leave under fire 01.06.2004 3.45pm NZPA NZ Herald

The new Holidays Act, made law just two months ago, is under fire from employer groups who say its provisions on sick leave and pay on public holidays are open to abuse.

But a leading union says any problem is not with the sick leave laws but with employers not enforcing them properly.

Under the Holidays Act 2003, made law in April, employees are now entitled to a minimum of five days' sick leave a year.

Previously, employees were entitled by statute to five days' special leave, which included both sick and bereavement leave.

The Employers & Manufacturers Association (Northern) chief executive Alasdair Thompson today called for an urgent review of the act with people eligible for penal rates if they took a sick day on a public holiday.

"It's hardly surprising the meat industry has reported a quadrupling in sick leave since the Act came into force," Mr Thompson said.

Communications adviser for the Department of Labour's Employment Relations Service Belinda Howard confirmed if somebody was rostered to work on a public holiday and called in sick, they were entitled to be paid at the public holiday rates.

But she said previously there was no legal requirement to provide a medical certificate. "It has been introduced now -- employers have a legal right to require a medical certificate after three days absence," she said. "It has given employers a right they didn't have before."

Mr Thompson said there was also a concern about what "relevant daily pay" could mean about work done on public holidays.

"Most legal opinion says this term means people working on public holidays are to be paid time and a half on top of what they used to be paid for working on the holiday."

Business New Zealand chief executive Simon Carlaw backed up the concerns on sick leave, saying members were concerned about abuse of sick leave.

"What we have been noticing is a number of expressions of concern from larger and smaller employers across the economy."

Members were also concerned that it was three days before a medical certificate could be required.

"There are some things to be taken advantage of and you have to assume, regrettably, that that is what's being done."

Mr Carlaw said Business New Zealand had written to Minister of Labour Paul Swain asking for a review. "In terms of the legislation as a whole it's a dog's breakfast.

"It is flawed...it wouldn't be an understatement to say there is very significant concern with the practical implementation and the cost and complexity of administering the Holidays Act."

Mr Swain who is currently in the Middle East was unavailable for comment.

But Engineering Printing And Manufacturing Union national secretary Andrew Little said it was entirely appropriate that people should get paid their allowed penal rates if they were sick on a public holiday.

"Going back 20-30 years the original policy was that if you were sick you don't lose pay."

Mr Little said workers relied on the allowances as part of their pay package which were absorbed into their lifestyles and shouldn't be denied.

If employers suspected people weren't genuinely sick, they should investigate and if necessary confront the employee, he said.

Watch for holiday sickies firms told 04 June 2004 By NICK VENTER stuff.co.nz

Employer organisation Business New Zealand is advising its members to watch out for "sickies" during Queen's Birthday weekend.

In an electronic newsletter to 15,000 members, the organisation said yesterday that some firms had reported higher-than-usual employee sick leave during Easter and on Anzac Day.

It blamed the new Holidays Act that requires employers to pay rostered workers time-and-a-half even if they call in sick on a public holiday.

Business NZ chief executive Simon Carlaw said he did not have proof to support the claims but there was a "solid flow" of anecdotal evidence of "greater-than-normal and, in some cases significantly greater-than-normal" sick leave on the past three public holidays.

"The coming holiday is a one-day job, no (medical) certification is required under the Holidays Act, and it's reasonable to think that the temptation the act provides may prove again to be irresistible for some," he said.

However, Council of Trade Unions president Ross Wilson said he was "absolutely confident" most workers would not abuse their new entitlement. Workers did not misuse sick leave. When they did it was usually because of poor employment relationships or poor management.

"I don't think it's very widespread but, of course, the ironic thing is that sometimes this sort of publicity can actually raise the awareness of the issue and may encourage some people who might not otherwise (do it) to do it."

A spokesman for Labour Minister Paul Swain said penal rates had been made mandatory on public holidays to compensate employees for the loss of the opportunity to spend time with their families.

The act, which took effect on April 1, gives workers time and a half plus a day in lieu for every public holiday worked.

If employers had reasons to suspect illness was not genuine they should raise their concerns with staff, Mr Swain's spokesman said.

Trade union leader questions holiday sick pay 09.06.2004 By AUDREY YOUNG, political editor NZ Herald

The country's top union figure has cast doubts on whether a new law entitles workers who claim sick leave on a public holiday to be paid time and a half.

The Department of Labour says workers who are sick on public holidays are entitled under the revised Holidays Act 2003 to penal rates. Employer groups say they are not.

Now Council of Trade Unions president Ross Wilson is effectively questioning the department's interpretation.

"I think it is probably an unintended consequence if people are able to get penal rates when they don't work on a public holiday - when the penal rates are intended to be paid only to people who do work on a public holiday," he told the Herald last night.

The confusion stems from a part of the act that contains a new minimum payment of time and a half for people working on a public holiday.

The department argues that the payment extends to those who call in sick on a public holiday because under the law sick pay is based on what the employees would have received had they been working.

Mr Wilson sat on the working group that reviewed holiday legislation, which was overhauled last year and took effect in April.

He said his organisation discussed the issue last week with the Labour Department and Business New Zealand and was looking at convening a working group to sort out the unintended consequences, on the understanding that it would not relitigate the act.

"There is a bit of confusion there, all right, and that needs to be clarified either by agreement, by the court or, if necessary, by some legislative amendment if it is agreed to be an unintended consequence."

The next statutory holiday was not until Labour Day in October and there was time to study the issue.

Asked what advice he would give about the entitlements of an employee who had taken sick leave on Queen's Birthday Monday, Mr Wilson said: "I haven't sat down and agonised over it. I am not giving employers or unions advice at all.

"I am just acknowledging that there is maybe an issue that needs to be addressed in relation to 'relevant daily pay' and how it impacts in respect of collective agreements that already have penal rates and/or possibly in relation to sick leave on a public holiday."

The term "relevant daily pay" is central to the confusion.

It replaced the term "ordinary rate" and is the base rate on which the new half-again payment is applied, over which there is no dispute if the day is worked.

The act says relevant daily pay for calculating a public holiday, sick leave or bereavement leave "means the amount of pay that the employee would have received had the employee worked on the day concerned".

It says that in calculating the relevant daily pay in the case of a public holiday, the half-again rate is not to be included in the base calculation - presumably to avoid penal rates on penal rates.

The act is silent on the question of sick leave being taken on a public holiday.

But a Labour Department handbook for employers, Managing Change Smoothly, says "if the day missed is a public holiday, the calculation must include a time-and-a-half entitlement".

The department could not be contacted for comment yesterday.

The Employers and Manufacturers Association (Northern) manager of employment relations, Peter Tritt, is advising employers they are not legally obliged to pay time and a half for sick pay unless there is an existing agreement to do so.

Wednesday, 16 June 2004
Questions for Oral Answer
Questions to Ministers
Question 8

Hon ROGER SOWRY (National) to the Minister of Labour:

Will any amendments to the Holidays Act 2003 be introduced and passed before Labour weekend; if not, why not?

Hon PAUL SWAIN (Minister of Labour):

Some issues have been raised with me about the implementation of the Holidays Act. Any clarification to the Act that may be required will need to be completed before Labour weekend.

Hon Roger Sowry:

Has the Minister seen any reports of companies that have encountered a huge increase in absenteeism on public holidays; if so, why does he still now require further evidence?

Hon PAUL SWAIN:

I have certainly seen media reports of that. I have asked for further information to ensure that any amendments that may be required - and I am certain there will be some - get to the heart of the problem.

Hon Mark Gosche:

What is the Minister doing to see whether any changes are needed to the Holidays Act?

Hon PAUL SWAIN:

I will be convening a working group comprising Business New Zealand, the Council of Trade Unions, and employers from major industry sectors to look at any unintended consequences arising from the implementation of the Act. They will advise me on what clarification is required.

Peter Brown:

From the Minister’s answer, can I take it that he is aware that some relatively highly-paid people are capitalising on the Holidays Act simply by exploiting the definitions "ordinary weekly pay" and "relevant daily pay"; if he is aware of that, will this working group address that issue also?

Hon PAUL SWAIN:

Yes, there are a couple of issues that have been brought to my attention. The first one is the issue of relevant daily pay and people potentially claiming time and a half on time and a half. The other issue is people who are rostered on for a public holiday potentially receiving time and a half and then calling in sick. This was not intended as part of the Act, and one of the issues I am sure the working group will advise me on is the clarification that is needed here.

Stephen Franks:

Why did the Minister’s new law expressly prohibit employers from asking for a certificate to protect themselves against fraudulent sickies, and how does he have the gall to insult employers by asking for more proof of exactly the frauds they predicted would happen, when they are not allowed to ask for proof that the sickies were fraudulent in the first place?

Hon PAUL SWAIN:

It certainly was not my intention to insult anyone. What I was seeking was further information. The issue that the member raises about proof of sickness is one of the issues that I am sure the advisory group will advise on.

Hon Roger Sowry:

How can the Minister stand with a straight face and say that this is part of an unintended consequence, when the select committee was told by officials that payment of time and a half on top of time and a half would be a consequence of passing the legislation, and when the Labour Government voted for the legislation and for sickies to be able to be had with no requirement of proof of sickness?

Hon PAUL SWAIN:

The member will be aware that this is the first change to the Holidays Act in, potentially, 50 years, and it is important that the principle of time and a half for public holidays be resolved. However, it is fair to say that some clarification is needed, and that is why we got the working group together.

Hon Roger Sowry:

Why does the Minister now say that he will listen to businesses in New Zealand, who told him that this legislation was a mess when it was before the select committee, and how does he reconcile his willingness to listen to them on this issue with his unwillingness to listen to them on the other employment changes he is pushing through at the moment?

Hon PAUL SWAIN:

The second aspect of the question is simply not true. There is a lot of effort going on, not just through the meetings I am having, but also, as the member knows, through the select committee, where business people are raising issues about the Employment Relations Bill. As far as the first issue is concerned, I have had a discussion with the Labour members on the select committee, and they do not recall the potential impact of the time and a half issue and people deliberately taking the time off on sick pay. That was an unintended consequence, and one of the things that may need to be addressed.

Hon Roger Sowry:

If the Minister is now so keen to talk to the Labour members of the select committee, will he make himself available to the whole select committee and turn up to explain to all its members any changes he is proposing?

Hon PAUL SWAIN:

I am due to be at the select committee on Thursday, and I am certain that this matter will not escape that member.