Are you required to work on a public holiday? Thinking of calling in sick, being paid time- and-a-half, and getting an additional holiday? Recent amendments to the Holidays Act 2003 (“Act”) will foil any such plan.
The Act came into force on 1 April 2004. Following the introduction of the Act, a number of unintended consequences soon came to light. Controversy surrounding these consequences quickly led to the drafting of the Holidays Amendment Act 2004 that took effect on 25 October 2004, just in time for Labour Day.
There are 11 statutorily recognised public holidays. Employees are entitled to be paid for public holidays if the holiday falls on a day that would otherwise be a working day for the employee. Many people are not actually required to work on public holidays and for them the Act works well.
If an employee does not work on a public holiday but would otherwise be required to work, the employee is still entitled to be paid at his or her “relevant daily pay rate”. The Act defines how relevant daily pay is
calculated. The calculation can be complicated as it may include productivity or incentive based payments (including commission); overtime payments; and the cash value of any board or lodgings provided by an employer.
Where an employee is required to work on the public holiday (where it falls on a day that is otherwise a working day and the employee’s employment agreement expressly requires it) the employee must be paid at time-and-a-half for the time actually worked on the public holiday, and is also entitled to an alternative holiday.
But what if the employee is sick on that public holiday? The Act provides that after six months continuous employment, an employee is entitled to five days sick leave in a 12 month period. The employee must be paid an amount equivalent to his or her “relevant daily pay” for each day of sick leave. One interpretation was that in this situation the employee was entitled to pay at time-and-a-half for the sick day plus an alternative holiday – hence the bonanza! The Act was unclear as to whether or not this was the correct position.
The amending Act clarifies this situation by stipulating that the day’s leave is to be treated as an unworked public holiday (not as sick or bereavement leave) and states that an employee is not to be paid at time-and-a-half and is not entitled to an alternative holiday.
Although the amendment aims to address a number of controversial and unintended consequences of the Act, there are outstanding issues in the finer details of the Act and the amendment that have the potential of involving ongoing challenges and significant cost to employers. Albeit, plans to call in sick when required to work will no longer provide a windfall for an employee.