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The countdown to Christmas is on. Many workplaces in New Zealand are planning their annual closedown over the Christmas period. This will likely mean that many employers are attempting to navigate the complexities of the Holidays Act 2003. We have set out to answer some frequently asked questions during this time of the year.
Can we enforce a closedown of our workplace at Christmas?
The Holidays Act 2003 specifically provides for annual 'customary' closedowns. A closedown period can be enforced where there is a clear custom and practice of a closedown period in the workplace or where they are provided for in the employment agreement.
The requirement that the closedown is a 'customary' closedown means that employers who have not had a closedown period must seek the agreement of their employees on the arrangements for a closedown.
Employers can have one closedown per year, provided that they give 14 days' notice to all employees before the shutdown commences.
Can I require my employees to take annual leave during the closedown?
If an employee is entitled to annual holidays at the commencement of the closedown period, an employer can require the employee to take annual leave.
What happens if my employee does not have enough annual leave for the whole of the closedown?
If an employee's annual leave does not cover the whole of the closedown period, the employee and employer can agree that annual leave is taken in advance. This means that the employee would have a negative leave balance.
What about employees who have worked for less than 12 months, and may not be entitled to annual holidays?
In this situation, employees should be paid 8% of their gross earnings from the start of their employment up until the commencement of the closedown period (less any payment already taken for annual leave). The employee's anniversary date, for annual holiday entitlement purposes, then moves to the date of the start of the closedown period. In addition, the employee and employer may agree that the employee takes leave in advance for some or all of the closedown period.
Christmas falls on a Sunday this year. Does this mean that I am not required to pay my Monday to Friday employee(s) for the Christmas Day public holiday?
No, the employees must still be paid. Further details are below.
When a public holiday falls on a weekend, the public holiday is "Mondayised" or "Tuesdayised". Christmas Day this year is Tuesdayised, and will be observed on Tuesday 27 December 2022.
This means that if the day is an otherwise working day ie an employee normally works on a Tuesday, and is not required to work, they must be paid their normal pay.
If an employee normally works on a Tuesday, and is required to work on the public holiday, they must be paid time and a half, plus an alternative holiday.
If the day is not an otherwise working day ie the employee does not normally work on a Tuesday, and is required to work, they are paid time and a half, but no alternative holiday.
It's important to get the payment of public holidays right. If you have any questions, please contact:
Melissa Johnston (Partner) on (09) 306 6729 (mjohnston@mcveaghfleming.co.nz)
See our Expertise pages
Written by Melissa Johnston
© McVeagh Fleming 2022
This article is published for general information purposes only. Legal content in this article is necessarily of a general nature and should not be relied upon as legal advice. If you require specific legal advice in respect of any legal issue, you should always engage a lawyer to provide that advice.
