4.08.2020

Cancelled Plans and Future Liabilities: A post lockdown annual holidays FAQ

COVID-19 has not only hit many employers hard in terms of economic impact, it has also confronted employers with many employment challenges that require urgent attention.

In regard to annual holidays, employers have been dealing with employees’ cancelled holidays, adjusted holidays, and annual holiday liabilities on the books. Below we answer your annual holiday questions.

  1. When does an employee become entitled to annual holidays?

    The Holidays Act 2003 (HA03) provides that an employee is entitled to a minimum of four weeks’ paid annual holidays after each completed 12 months’ of continuous employment.

    Under the HA03, annual holidays do not ‘accrue’ during employment despite what the payroll system might say.  If an employee wants to take annual holidays when the employee does not have an entitlement, the employee will need to request to take an agreed portion of the entitlement in advance.

    The HA03 does not prevent an employer from providing an employee with enhanced or additional entitlements.  For example, if the employer wants its employees to receive an annual holidays entitlement from the start of employment or give employees more than four weeks’ paid annual holidays, it is welcome to do so.

  2. When can an employee take annual holidays?

    An employer must allow an employee to take annual holidays within 12 months after the date on which the employee’s entitlement to the holidays arose.

    When exactly the annual holidays are to be taken is to be agreed between the employee and the employer.  Often, an employment agreement or workplace policy will have a process for requesting holidays, and having them approved.

    If an employee elects to do so, the employer must allow an employee to take at least two weeks’ annual holidays in one block.

  3. Can an employer cancel an employee’s annual holidays that have already been agreed?

    Generally speaking, the answer is ‘No’. If an employee’s request to take annual holidays is approved, subsequent revocation of the approval would be unlawful. However, it is important to look at the wording of the employment agreement and to exercise the parties’ obligation to act towards each other in good faith, and to try and reach agreement where possible.

  4. Can employers direct employees to take annual holidays?

    Yes, an employer may require an employee to take entitled annual holidays if the employer and employee are unable to reach an agreement about when the employee will take his or her annual holidays. The employer must give the employee at least 14 days’ notice when directing the employee to take annual holidays.

  5. Can an employer direct or require an employee to take annual holidays in advance?

    No, annual holidays in advance can only be taken by agreement. An employer cannot direct or require an employee to take annual holidays in advance, not even with notice.

  6. Can an employee top up his or her salary with holiday pay or be paid holiday pay for a portion of the employee’s remuneration?

    No, an employee must be on annual holidays to receive holiday pay. An employee cannot work and be on annual holidays at the same time.

  7. When can an employee cash up annual holidays?

    Annual holidays can only be cashed up:

    • If the employee asks in writing; and
    • If the annual holidays are entitled holidays; and
    • To a maximum of one week’s worth of annual holidays in each entitlement year.

    If an employee makes a request the employer must:

    • Consider the request within a reasonable time; and
    • Advise the employee in writing if the requested is agreed to or not.

    If the request to cash up annual holidays is agreed to by the employer, the employer must pay the employee as soon as practicable, for example, in the next pay run. An employer may decline the employee’s request to cash up annual holidays, and if so, does not need to provide the employee with a reason for declining the request.

Hesketh Henry’s Employment Law Team are experts on the HA03.  If you have any HA03 related query, please get in touch.

 

The information contained in this article is current at the date of publishing and is of a general nature.  It should be used as a guide only and not as a substitute for obtaining legal advice.  Specific legal advice should be sought where required.

 

 

 

 

 

 

Do you need expert legal advice?
Contact the expert team at Hesketh Henry.
Kerry_100x100 1
Media contact - Kerry Browne
Please contact Kerry with any media enquiries and with any questions related to marketing or sponsorships on +64 9 375 8747 or via email.

Related Articles / Insights & Opinion

Bereavement Leave Confirmed for Miscarriages and Stillbirths 
New Zealand has become the second country in the world to pass legislation that provides bereavement leave for mothers and their partners after a miscarriage or stillbirth.
26.03.2021 Posted in Business Advice & Employment Law
Court of Appeal Overturns Employment Court’s Decision in Tourism Holdings
Tourism Holdings Limited v A Labour Inspector of the Ministry of Business, Innovation and Employment (Tourism Holdings) is the first decision in which the Employment Court considered section 8(2) of the Holidays Act 2003 (Act). The Court of Appeal has recently overturned this decision.
26.03.2021 Posted in Business Advice & Employment Law
Guarantees must be in writing and signed to be enforceable
For a guarantee to be enforceable, the requirements set out in section 27 of the Property Law Act 2007 (Act) must be strictly complied with.  This is what the NZSC held in Brougham v Regan. The key i...
19.03.2021 Posted in Business Advice
UK Supreme Court Delivers Decision on Uber Driver Employment Status
The distinction between employee and independent contractor can be complex, particularly where the nature of the business model blurs the lines of standard employment practices.
16.03.2021 Posted in Business Advice & Employment Law
Holidays Act Overhaul – Taskforce Recommendations
There have been calls for an amendment of the Holidays Act 2003 (Act) for some time.
16.03.2021 Posted in Business Advice & Employment Law
Unwanted Land Covenants and Easements: Seeking a Court Order
The Supreme Court recently considered an application by Synlait Milk to modify a land covenant restricting the burdened land use to farming, grazing and forestry operation to protect the ability of the benefited land owner to develop a quarry.  This article looks at the circumstances in which the courts might give relief to parties in an application to extinguish or modify a covenant or easement.
15.03.2021 Posted in Property Law
New ICC Arbitration Rules 2021 come into force
The revised International Chamber of Commerce (ICC) Arbitration Rules for 2021 (2021 Rules) have now come into force and apply to all ICC arbitrations begun after 1 January 2021.  While the new Rules...
10.03.2021 Posted in Litigation & Dispute Resolution
Send us an enquiry
For expert legal advice, please complete the form below or call us on (09) 375 8700.
  • This field is for validation purposes and should be left unchanged.
-->