24.10.2019

Who is working when? Public holidays and ‘otherwise working days’

With Labour Day just around the corner, and Christmas/New Year looming, we are getting a few questions about the “otherwise working day”.

This concept is important because it determines whether a person who does not work on a public holiday receives payment for the day, and also whether a person who does work on the public holiday is entitled to an alternative holiday (day in lieu). 

For most employees, deciding whether a public holiday falls on a day that would otherwise be a working day for that employee will be an easy task.  If the person’s working hours include, for example, Mondays, and Labour Day falls on a Monday, the employee will receive payment for the public holiday – that is, they will not work, and will be paid their relevant daily pay. 

However, for an employee who works variable hours, or for a casual employee who is engaged on an ‘as and when required’ basis, the task is not so simple.   For these sorts of employees, figuring out what would be an otherwise working day needs to be assessed on an employee by employee basis.

Section 12(2) of the Holidays Act 2003 provides that if it is unclear whether the day would otherwise be a working day for the employee, the factors that the employer must consider include:

  • What the employment agreement says;
  • The employee’s usual work patterns;
  • Any other relevant factors such as if the employee works for the employer only when work is available or the employer’s rosters or other similar systems; and
  • Whether, but for the day being a public holiday, the employee would have worked on the day concerned.

Some employers will look at whether the employee worked on the day in question for a set number of  weeks leading up to the public holiday.  If the public holiday falls on a Monday and the employee has not worked, for example, the last 4 Mondays, the employer deems that the public holiday would not otherwise be a working day for that employee.  This can be a setting in the payroll system.

For reasons of simplicity and convenience, it is easy to see why an employer would prefer a strict mathematical formula that is automated in the payroll system.  However, an automated rule may not comply with the Holidays Act, as illustrated in Wendco (NZ) Limited v Labour Inspector of MBIE.

In Wendco, the Employment Relations Authority found that the employer’s rule – a three week assessment automatically applied by the payroll software –  restricted or reduced some employees’ entitlements to alternative holiday days and created a risk of targeted rostering.

The Authority said that there was no ‘one size fits all’ answer to the question of what period the employer’s assessment needed to cover, although it would be “considerably longer than the preceding three weeks”.  The Authority expressed a view that 12 months would be too long, but a three to six month period might be a reasonable time over which to assess all of the factors set out in s12(3). However, the emphasis was on a genuine consideration of the factors, rather than a rigidly applied, or automated rule.

The Authority considered and rejected the employer’s argument that assessing each person individually would be prohibitively expensive and time-consuming, and might mean closing on public holidays or charging a surcharge.  The Authority said these were not considerations that needed to be taken into account.  In other words, the legislation does not provide concessions for employer inconvenience.  The Authority concluded that “An individual employee approach is simply part of the price Wendco pays for the benefit of the convenience it gains by using variable rosters”.

It is clear that the Authority is interested in compliance, not convenience.  The employer must turn its mind to a genuine consideration of the factors, rather than a blanket rule.

If you have any questions about how this might apply in your business, please do not hesitate to give us a call.

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

Alert Level 3; Hi-ho, hi-ho, back to work we go?
In Auckland, we’re excited to be moving to Alert Level 3, if only so we can take a break from cooking every single meal! 
21.09.2021 Posted in Business Advice & COVID-19 & Employment
M&A Pricing Mechanics: Completion Accounts vs Locked Box
A critical period in the timeline of any M&A share transaction is the period between signing the Share Sale and Purchase Agreement and completion.
Climate Change and the Construction Industry: Counting down to a national strategy
The Government is getting closer to the publication of a national strategy for responding to climate change.
21.09.2021 Posted in Climate Change & Construction
Formation of Contract: Black Sea Commodities Ltd v Lermarc Agromond Pte Ltd
The English High Court decision in Black Sea Commodities Ltd v Lermarc Agromond Pte Ltd [2021] EWHC 287 highlights the importance of parties to commodities contracts expressly including an arbitration clause in the contract. This is particularly when the contract is formed by email or instant messaging negotiations.
20.09.2021 Posted in Litigation & Dispute Resolution
August 2021 Lockdown – what financial support is available?
The Government is offering various support schemes to help employees and businesses cope with the 2021 COVID-19 Lockdown.  Given the differing eligibility requirements it is easy to become overwhelmed.
20.09.2021 Posted in Business Advice & COVID-19 & Employment
Clarity on Liquidated Damages following Termination
The United Kingdom Supreme Court in Triple Point Technology Inc v PTT Public Company Ltd [2021] UKSC 29 has clarified the operation of liquidated damages clauses in the event of termination.  The dec...
Is your will in draft form?  High Court refuses to exercise its discretionary power to validate a draft will notwithstanding beneficiaries’ consent
The High Court’s recent decision in Re: An application to validate the will of Olive Ruby Piper [2021] NZHC 534 serves as a valuable reminder to make sure that your estate planning documents are...
16.09.2021 Posted in Family & Trust Wills Estates
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.
-->