3.02.2021

Increase in sick leave entitlement – what you need to know

The Holidays (Increasing Sick Leave) Amendment Bill (the Bill) was introduced in December 2020 and passed its First Reading on 1 December 2020. With the government’s clear majority, the Bill is anticipated to pass in mid 2021 and come into force two months after.

The purpose of the Bill is to increase the availability of employer-funded sick leave for employees to ensure that employees have better access to sick leave when they, or their dependents, are sick or injured.

The Bill will bring New Zealand in line with Australia by amending the Holidays Act 2003 (the Act) to increase an employee’s entitlement from 5 to 10 days’ sick leave per 12-month period. It also proposes to amend the Act to reduce the number of unused sick leave that may be carried over from 15 (current) to 10 days per year. The maximum entitlement to sick leave at any one time remains the same at 20 days. 

If and when the Bill comes into force, new employees will be eligible for 10 days’ sick leave after working for six months and the entitlement for existing employees will increase to 10 days when they next become entitled to sick leave for a 12-month period.

There are important implications to note as a result of these proposed, but likely, changes.

Neither the Act nor the Bill provides for pro-rating of sick leave.  This means that a part time employee has, and will continue to have if the Bill is passed, a greater proportion of sick leave than a full time employee.  For example, an employee that works 5 days a week, who currently gets a minimum of 5 days sick leave, will have his or her entitlement increased to 10 days per year.  This is a total of 2 working weeks a year.  In contrast, a part time employee who works, for example, 1 day a week, who currently gets a minimum of 5 days sick leave a year, will have his or her entitlement increased to 10 days per year.  This would amount to a total of 10 working weeks of sick leave per year.

It is recommended that employers take this opportunity to revisit and review their employment agreements, collective agreements and policies in relation to sick leave. If and when the Bill passes, is your employment documentation compliant?  If you already offer extra sick leave to employees, what are the implications if the Bill passes – does the entitlement remain the same or do employees get an extra 5 days? If employers no longer wish to offer enhanced sick leave entitlements you may need to amend your templates and policies, vary employment agreements with existing employees and speak to unions about the collective agreement clauses. 

If you have any questions about the Bill, or holiday and sick leave entitlements in general, please get in touch with our Employment Law Team or your usual contact at Hesketh Henry.

 

Disclaimer:  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
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

Force Majeure – Not A Get Out Of Jail Free Card
Woolworths Group Ltd v Twentieth Super Pace Nominees Pty Ltd [2021] NSWSC 344
17.06.2022 Posted in Trade and Transport
Payment Claims: Incorrect Due Date From Delayed Delivery
Nicholls Group Projects Ltd v Plan Design Build Homes Ltd
20.05.2022 Posted in Construction
Employment Court Deems Gloriavale Residents Employees
The definition of “employee” in the Employment Relations Act 2000 (ERA) can at times be tricky to navigate; recent cases involving builders, couriers, and uber drivers can attest to the issues tha...
18.05.2022 Posted in Employment
New proposals on modern slavery place higher responsibilities on NZ organisations
Over recent years, modern slavery has become a more prominent issue in New Zealand.
13.05.2022 Posted in Business Advice
Insurance Contracts Bill – submissions on exposure draft closing soon
As we reported in late February, the Ministry of Business, Innovation and Employment (MBIE) is seeking submissions on the exposure draft Insurance Contracts Bill.  Submissions close on 4 May 2022. MB...
20.04.2022 Posted in Insurance
Matariki and Fair Pay Agreements
Matariki Te Pire mō te Hararei Tūmatanui o te Kāhui o Matariki (Te Kāhui o Matariki Public Holiday Bill) received Royal Assent yesterday, and the new Act comes into force today – 12 April 20...
12.04.2022 Posted in Employment
A Landmark Change? – Proposed reform of the occupational regulation of engineers
Engineers engage in building work that is critical to public safety. Despite this, few restrictions are placed on who can carry out and supervise complex and specialised projects that require high levels of professional judgement, skill and technical competence.
07.04.2022 Posted in Construction
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.
-->