Employment Law Update – ‘Tis the season... for Holidays Act disputes

Home Insights Employment Law Update – ‘Tis the season... for Holidays Act disputes

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Contributed by: Richard McIlraith and Kylie Dunn

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Published on: November 06, 2015


With seven weeks to go until Christmas, it is important to start looking ahead to proactively manage your employees’ leave. Whether your company shuts down over Christmas or you are instead managing multiple requests for leave, there are some important obligations to keep in mind. Below are some suggestions and tips so you can avoid the Holidays Act putting a dampener on your Christmas spirit.

Cracking the Christmas closedown

If you are considering, or usually have, a closedown period over the Christmas break there are several requirements to tick off your Christmas list. If you have been good this year, you will:

  • only have one closedown in a 12 month period;
  • give employees at least 14 days’ notice that they are required to take annual leave for the closedown period (or discontinue work);
  • pay those employees who take annual leave during the closedown in the usual way (ie the greater of an employee’s ordinary weekly pay or average weekly earnings); and
  • agree how employees with no annual leave will be paid for the closedown.

For the most part, closedown periods are straightforward – they happen at the same time each year and employees have annual leave available to cover the time off work. However, new employees or those who have used their annual leave up during the year can present a dilemma. Here’s how to handle this situation if the employee has not become entitled to annual leave yet, or does not have enough annual leave for the closedown period:

  • the default position is that the employee is paid 8% of their gross earnings since they commenced employment or since they last became entitled to annual leave (less any amount paid for annual leave in advance or paid “as you go”);
  • you can agree that the employee takes some (or all) of the closedown period as annual leave in advance; or
  • you can agree that the employee takes unpaid leave.

These options can have implications for the timing of the employee’s anniversary date for leave purposes, so best to ensure you start planning early.   

Transferring public holidays

For any number of reasons, employers or employees may want to observe a public holiday on a different day (for example, because of different days of religious significance). The Holidays Act provides a mechanism whereby employers and employees can agree to transfer the observance of a public holiday to another working day. Any agreement must be in writing and satisfy the following criteria:

  • The particular public holiday being transferred:
    • must be identified; and
    • must otherwise be a working day for the employee.
  • The day to which the public holiday is being transferred:
    • must be identified or identifiable;
    • must otherwise be a working day for the employee; and
    • must not be another public holiday.

Critically, you cannot transfer a public holiday to stop an employee receiving their entitlements for working on a public holiday (ie time and a half and a day in lieu). An employee is entitled to a paid day off on the day to which the public holiday is transferred, and if an employee works on this day, they will be entitled to remuneration as if the public holiday had not been transferred at all.

In particular circumstances, you may also agree to transfer only part of a public holiday. This is possible where an employee starts work on one day and finishes work on the next day, and either (or both) of these days are a public holiday. 

Holidays on the weekend

With Boxing Day and 2 January falling on a Saturday, the 2015 Christmas season brings with it the age old question – when is the public holiday observed? 

The answer depends on whether Saturday would “otherwise be a working day” for the particular employee. If it would, then the employee observes the public holiday on the Saturday. If Saturday would not “otherwise be a working day” for the employee (which will be the case for all Monday to Friday employees) then the Saturday is a normal day (for Holidays Act purposes) and the public holiday is observed on the Monday. 

Finally, if employees usually work both Saturday and Monday, they only observe each public holiday once – on the Saturday. 

Don't be a scrooge – correct payment for on call workers

During the holiday period, it is important to remember the specific requirements in the Holidays Act for those staff who may not be in the workplace, but are on call. The Holidays Act sets out a range of different entitlements for on-call employees. These entitlements vary depending on whether the employee is called out and what limitations exist on their activities while on call. We have summarised these in the table below:

Public holiday where:

Entitled to alternative holiday?

Other entitlements under the Holidays Act?

Employee is called out and that day would otherwise be a working day


Paid at least time and a half for time worked

Employee is called out and that day would not otherwise have been a working day


Paid at least time and a half for time worked

Employee is not called out (but has activities restricted while on call) and that day would otherwise have been a working day



Employee not called out but the day would otherwise have been a working day


Paid relevant daily pay/average daily pay

Employee not called out and duties not restricted while on call (for example, where the employee can refuse the call out)



Update from the bench

Last month, the Employment Court introduced a pilot costs regime, in line with the High Court's scale of costs, to be applied to cases filed after 1 January 2016 and decided before 31 December 2016. The Chief Judge noted that the guidance scale will be on a trial basis and is intended to assist the parties to calculate and settle costs themselves, by reference to the schedules.” It is unclear at this stage whether this regime will be imposed, or applied by consent.

Further information can be obtained here. We will keep you updated.

Please feel free to get in touch with a member of the team if you would like to discuss this, or any other issue.



This publication is intended only to provide a summary of the subject covered. It does not purport to be comprehensive or to provide legal advice. No person should act in reliance on any statement contained in this publication without first obtaining specific professional advice.

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