Important Updates For Employees and Employers – Holidays Act 2003
Many people are aware of the new Holidays Act, which came into force on 1 April 2004. There has been much discussion surrounding the terms of the Act, in particular the provision of four weeks annual leave to all employees. There are also other changes to employee entitlements, some of which are as follows:
- Minimum entitlement of three weeks annual holiday after one year’s employment. The four week entitlement comes into force in April 2007.
- Employees are to receive a minimum of five days paid sick leave after six months of employment.
- There is now a separate entitlement to bereavement leave. After six months of employment, the employee is entitled to three days of bereavement leave on the death of close
family members. In addition, and by agreement with the employer, the employee may receive 1 day of bereavement leave on the death of any other person who had a close relationship with the employee. An employee can apply for this bereavement leave in respect of each bereavement suffered. (These provisions differ from the Holidays Act 1981 whereby the entitlement for sick leave and bereavement leave was a total of five days).
- Pay rates of time and a half are to be paid for employees who work on a public holiday.
- There are new rules governing when annual leave can be treated as sick leave or bereavement leave.
These are of course minimum entitlements and many employees will have negotiated terms in excess of these provisions with their employers. If so, these entitlements will remain in force and will not be altered by the new Act.
All existing employment agreements must be amended to reflect the changed provisions by 1 April 2005.
We have prepared a letter to employees for use by our employer clients. This letter outlines the basic provisions of the new Act, and annexes the new clauses which will replace the provisions of the Holidays Act 1981 in each employment agreement. We envisage that the letter and attached new clauses will be discussed between employer and employee,
and then signed by both parties to indicate consent to the variation of the existing employment agreement. The letter and the new clauses can then be annexed to the employment agreement and employers will have fulfilled their obligations in respect of updating employment agreements.
An important new aspect of the Act for employers is the keeping of a Holiday & Leave Record Book. We would be pleased to discuss exactly what records and data are required to be kept as part of this book with our employer clients. Holiday records must be retained for a period of 6 years.
In addition, employers are advised to familiarise themselves with the new calculations of annual holiday pay and other leave. There are also new requirements for pay-as-you-go holiday pay for employees on fixed term contracts.
These matters are important as the new Act carries fines for failing to comply. Briefly, every employer who acts in contravention of the new Act, or who fails to comply with its provisions, commits an offence. Individual employers who breach the Act are liable to a penalty not exceeding $5,000.00, and companies to a penalty not exceeding $10,000.00.
In summary, we would be pleased to advise employees and employers alike on the changes to the Holidays Act. We can provide amendments to current employment agreements to ensure compliance with the Act, and entirely new employment agreements for staff hired after 1 April 2004. We are also able to provide casual agreements and fixed term agreements, all of which reflect the new Holidays Act provisions. We invite you to telephone either Michael Robinson or Claire O’Donnell in order to discuss how the Holidays Act will affect you and your requirements for compliance under that Act.
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