SWAPPING PUBLIC HOLIDAYS
It used to be thought permissible, with the agreement of the employee and the employer, to observe a public holiday on a different day, providing the employee entitlements were paid as though the alternative day was in fact a Public Holiday
Examples of how it used to work:
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Where a Province day fell on a Monday, the employer and the employees could agree to observe the Public Holiday on the following Friday, (or on the Tuesday following Easter, or some other day which suited both the employee and the employer). Sometimes the agreement was with the entire workforce (through the union or otherwise) and sometimes it was an individual agreement. The effect of the agreement was that on the Province day, the employee worked as normal, at flat rates. On the following Friday, the day is treated as a Public Holiday. If the employee worked, he/she is entitled to time and half, plus an alternative day. If they don’t work, they a re entitled to a paid holiday (a 'stat day' holiday).
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Shift workers
Where the employer operated a shift system and a shift spanned midnight, the employer would incur substantial additional costs because of the Public Holiday entitlements under the 2003 Act. Where for example, where a shift pattern was:
11.30 p.m. to 7.30 a.m. (night shift); 7.30 a.m. to 3.30 p.m. Early shift; 3.30pm to 11.30pm (late shift)
The Public Holiday period is 24 hours from midnight to midnight.
Where a Public Holiday fell in these circumstances:
- the night shift would be paid 30 minutes at flat rate and 7.5 hours at time and a half. Plus an alternative day.
- The early shift will be paid 8 hours at time and a half and an alternative day
- The late shift will be paid 8 hours at time and a half and an alternative day
- The next night shift will be paid 30 minutes at time and a half and 7.5 hours at flat rate, PLUS A WHOLE ALTERNATIVE DAY IN LIEU.
To deal with this issue a number of employers reached an agreement with the employees that public holidays would be observed for the 24 hours from 11.30 p.m. to 11.30p.m. which eliminated the additional shift receiving entitlements.
It was thought that this was the intention of Parliament when the Holidays Act 2003 was enacted.
THE CURRENT LAW
There were a number of court decisions about the way in which the Act was drafted and in November 2007, the Supreme Court heard a case, The New Zealand Airline Pilots' Association Industrial Union of Workers Inc v Air New Zealand Ltd and decided that the way in which the Holidays Act 2003 was drafted, meant that it was not possible to effectively swap public holidays. The Supreme Court found that the employer MUST pay public holiday entitlements to employees who work on a public holiday even if the employee had agreed to the swap – or had wanted to swap for the employee’s reasons.
The effect of this case is that the employer now has no alternative but to pay time and a half for the actual Public Holiday, (plus an alternative day if it’s the employees normal working day) regardless of any agreement between the parties.
If you have also offered to treat the swapped day as a public holiday you may have a contractual requirement to do so.
OUR ADVICE?
DO NOT BOTHER SWAPPING PUBLIC HOLIDAYS - OBSERVE THEM ON THE CORRECT DAYS
THE FUTURE?
Trevor Mallard has announced that there will be an amendment to the law because this case:
"has had a significant effect on many businesses that operate shifts that span two calendar days. Where a shift has ended on a public holiday, many of these businesses had agreements with employees to transfer the public holiday to the following shift the employee would have worked. However, as a result of the Court decision, some businesses now stop work at midnight and resume the shift 24 hours later, which means the employees work a split shift and are not able to enjoy a whole working day off as a public holiday.
This amendment will apply when an employee's shift spans two calendar days and at least one of those days is a Public Holiday. A shift may only be transferred if there is a genuine agreement between an employee and employer, and employees keep their statutory rights to Public Holidays. "
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