Alternative holidays (days in lieu) for employees who work on public holidays

Our Holidays Online Tool (http://ers.govt.nz/holidays-online-tool/default.aspx) makes it easy to work out what pay and leave an employee is entitled to on public holidays. You can also use it to work out sick and bereavement leave entitlements. Make sure you have payroll information or a pay slip handy when you use the tool.

If an employee is required to work on a public holiday, and it would otherwise be a working day for the employee they are entitled to a whole day's alternative holiday at a later stage.

The entitlement to an alternative holiday applies consistently to all public holidays including ANZAC Day and Waitangi Day.

This provision includes employees working shifts and some employees on call. Both types of employees get a full day off later, even if they only work for a small part of the public holiday.

When is an employee entitled to an alternative holiday?

An employee will be entitled to an alternative holiday where they can show that the public holiday they worked would otherwise have been a working day for them. The question to ask is “would the employee have worked on that day anyway?”

Our Holidays Online Tool (http://ers.govt.nz/holidays-online-tool/default.aspx) helps answer this.

The Holidays Act 2003 gives some guidance to employers as to what to look at to see if the employee would have worked on that day anyway, such as:

• the employment agreement
• the employee's working patterns
• whether the employee works for the employer only when work is available
• the employer's rosters or other similar systems
• the reasonable expectations of the employer and employee that the employee would work on the day concerned.

For example, if the employee had worked for the previous three Fridays before Good Friday with the same employer, and they were expected to work on Good Friday as well, Friday is likely to be an otherwise working day for that employee. Because of this, if that employee is required to work on Good Friday, they will be entitled to an alternative holiday as well as time and a half for the work that they do on the day.

If, however, the employee did not usually work Fridays and it was agreed they would work on Good Friday they would not be entitled to an alternative holiday for working on Good Friday (but they would be entitled to time and a half payment for the hours they worked).

If the issue is too difficult for the employer and employee to determine themselves, a Labour Inspector can determine the issue for the parties.

Where an alternative holiday does not apply

An employee is not entitled to an alternative holiday when:

• they work on a public holiday that is not otherwise a working day
• they are on call on a public holiday but are not required to restrict their activities
• they are only employed to work on public holidays
• they are scheduled to work on a public holiday but are unable to work because of sickness or a bereavement.

Payment for alternative holidays

The alternative holiday can be taken at any time mutually agreeable to the employer and employee, and is paid at the employee's relevant daily pay for the day taken off.

If the employer and employee cannot agree, the alternative holiday may be taken at a time determined by the employee, having regard to the employer's view of what is convenient.

Fourteen days notice must be given when an employee is taking an alternative holiday.

If the alternative holiday is not taken within 12 months of it accruing, the employer can direct the employee to take the alternative holiday. Alternatively at that time the employee may ask the employer to make a payment instead of having the holiday off. If the employer agrees to make a payment the level of payment is a matter of agreement between the employer and employee.

If any alternative holidays are outstanding at the time of resignation or termination, these are paid out at the rate of pay for the employee's last day of work, i.e. their relevant daily pay.

Transitional arrangements for “days in lieu”

“Days in lieu” owed under the Holidays Act 1981 should be treated as alternative holidays. All of the rules about alternative holidays apply to these “ days in lieu” as if they were in place when the entitlement arose.

What happens if an employee schedules themselves to work on the public holiday?

In circumstances where the employee manages their own work times – say where work is delivered and collected weekly – and a public holiday occurs, the employer and employee should clarify prior to the holiday whether the work will be undertaken on the public holiday. The adequacy of the time available to undertake the work, and the employee's normal working patterns should be taken into account.

We welcome the opportunity to help you further. If you want further clarification, more detailed information or guidance on any matter covered here, contact the Department of Labour Contact Centre 0800 20 90 20.