The new Employment Leave Bill which seeks to repeal the Holidays Act 2003 has passed first reading at Parliament. Workplace Relations and Safety Minister Brooke van Velden announced having passed the first reading in Parliament the Bill is now ready to receive public feedback.
The proposed simpler approach is touted as a win for both employees and businesses alike. The goal being to simplify how leave is calculated and managed, and provide a robust fair system for all far more fit for purpose than the current Act.
Key Changes Proposed
1. Leave Available From Day One
- All employees regardless of status, gain access to leave from their first day of employment — no more 6- or 12-month waiting periods.
2. Hourly Accrual of Leave
- Annual leave:
Accrues at 0.0769 hours per hour worked (equivalent to 4 weeks per year for full-time staff).
- Sick leave:
Accrues at 0.0385 hours per hour worked (equivalent to 10 days per year).
- Sick leave can accumulate up to 160 hours (20 days) and be taken in hours, not just full days.
- Casual workers still get pay as you go see LCP below
3. Bereavement & Family Violence Leave
- Accrues from day one.
- Accrued on a daily basis.
- Can be taken in part-days.
4. Annual Leave Cash-Out
- Employees can request to cash out up to 25% of their annual leave every 12 months, instead of being limited to one week.
5. Working Pattern Changes Made Easier
- Employees keep previously accrued leave as hours, even if they change from full-time to part-time (or vice versa).
- This addresses a major flaw in the current Holidays Act that can reduce entitlements when work patterns change.
6. Public Holidays & Alternative Days
- Public holidays are paid if they fall on an Otherwise Working Day (OWD).
- A clearer test for OWD:
- If the employee worked at least 50% of that weekday over the preceding 13 weeks.
- Alternative holidays (when employees work on an OWD):
- Accrue hour-for-hour
- Can be taken or cashed out immediately (no 12-month wait).
7. Leave Compensation Payments (LCP)
- Applies to:
- Casual workers, or
- Employees who work beyond their contracted hours.
- Instead of accruing leave, those extra hours are paid at +12.5% to compensate for annual and sick leave.
8. Mandatory Detailed Payslips
- Employers must provide payslips each pay cycle showing:
- Earnings
- Leave accruals and balances
- This is new and not currently required under the Holidays Act 2003.
Timeframe
- Passed into law: Before the November 2026 election
- Transition period: 24 months between passing the bill and implementation for business, up to 10 years for state schools.