Indian Newslink April 15, 2016 Digital Edition

14 BUSINESSLINK
April 15, 2016
No leave of absence for employers on Holiday Pay
Dave Ananth
Do you suspect that the
Holiday Pay that you
received before Christmas
was less than your
entitlement? Do you believe
that the amount received
was wrong or that it was not
included in your pay?
Holiday Payhas been in the
news recently for the wrong
reasons, wrong calculations or a
botched IT payroll system.
Some employers got it wrong
and have paid massively for it.
In 2014, an Auckland company
was ordered to pay $256,000
in Holiday Pay including
interest to a former manager,
on top of a multi million dollar
payout.
The Court ruled that the manager
was entitled to Holiday Pay
on earnings received after the
last day on the job. The ruling
was clear that employers are
obliged to give Holiday Pay on
gross earnings, including bonuses
or commissions received
after the job is over.
Universal application
Holiday Pay is governed by
the Holiday Act 2003, Section 3
of which describes the purpose
of the Act, which is to promote
balance between work and
other aspects of employees’
lives and to provide employees
with minimum entitlements.
The provisions of the Holidays
Act apply to all employees
regardless of whether they are
full-time, part-time or casual. It
does not discriminate.
The Statute provides that
every employee is entitled to
a minimum of four weeks’
annual leave per calendar year,
exclusive of public holidays
after one year of work.
This is paid leave. Employees
must be given the opportunity
to take two of the four weeks
as continuous holidays if they
so wish. Section 6 of the Act
states that the Act entitlement
herein guarantees employees’
minimum rights. It does not
prevent them and their employer
to negotiate better holiday
conditions.
At the first instance, for most
people, the name in itself seems
to suggest that Holiday Pay
is designed to give you more
money for your holidays.
That is not the case.
The aim of the Holiday Pay
Act 2003 is to give employees
‘Paid Holiday.’
Employer obligation
Employees will be able to
take their break, go surfing and
return to work rejuvenated.
Holiday Pay does not replace
a wage or salary. It is on top of
your regular pay. If the employee
does not have the holiday
on the day itself because they
have agreed to work, then they
must have it at some other time.
The Courts have ruled that an
employer cannot contract out
of the legislative obligation
of providing a paid day off by
providing greater rates of pay.
Holiday Pay is typically
calculated at 8% of gross
earnings and is shown as a
dollar amount or if they worked
less than a year, calculated on a
pro-rata basis. The calculation
must include all salary, wages,
overtime pay, allowances and
commission.
Confusing calculations
The method used for calculating
Holiday Pay is the main
culprit for the confusion.
It gives you two methods of
calculating holiday pay,taking
the greater of the two as the
correct amount as the weekly
Holiday Pay.
One is based on ordinary
weekly pay - earnings over
last four weeks, divided by
four. The other involves taking
total gross earnings in the first
continuous 12-month period of
employment and dividing these
by 52.
The higher of the two sums
will be used to calculate your
holiday pay.
Part-timers must agree with
their employer on what is a
‘work week’ for easy calculation
of Holiday Pay.
Recurring mistakes
Mistakes happen when 8%
is taken from the employment
contract sum rather than what
is actually in the pay packet.
It is suggested that a method
encompassing full and parttime
employees is designed for
certainty and clarity.
It is good practice to separate
the wages from the Holiday
Payin the pay packet.
This will make them easily
traceable in future and avoid
complications. The employer
could be forced to pay out all
over again.
Holiday Pay is not paid like
regular pay unless it becomes
difficult to calculate as your
hours are so irregular. Or you
are in a fixed term agreement.
Otherwise, for all purposes,
you will receive Holiday Pay
either when you take a holiday,
or agree with your employer
HOLIDAY= NO WORK
NO WORK = NO PAY
THEREFORE
HOLIDAY = NO PAY NEITHER LOGICAL
to cash up some of your holiday
entitlement, or your employment
ends.
A local daily reported that
the Labour Inspectorate
confirmed that since 2012,more
than 40 employers have been
investigated for payroll-related
NOR LEGAL!
breaches of the Holidays Act and
more targeted investigations are
planned.
It is time that some certainty is
given to the law on Holiday Pay
which at this juncture is not a
vacation at all.
Dave Ananth is an experienced tax barrister practicing in
Auckland. He was an IRD Prosecutor based in Manukau
before establishing his private practice. He is now in Malaysia
advising on GST compliance on a two-year contract. He is
a regular speaker at various conferences and seminars.
Email: davetaxnz@gmail.com; www.davetaxnz.nz
The above should be read as of general interest and should
not be considered as legal advice or suited to all persons at
all circumstances. You should consult your employer or seek
proper expert or legal advice (at no cost to the author or to
Indian Newslink and its employees) in respect of your case.
No exemptions for employee rights
Gurjinder Singh
New Zealand has a
comprehensive set of
employment laws that
keep workplaces fair.
International students have
rights like New Zealand citizens
and residents in the matter of
employment, but they must be
aware of the relevant laws and
rules.
There are thousands of
students working on casual and
part-time basis.
Those on casual employment
must be available when
required by the employer
tofill a leave vacancy, meet an
unforeseen situation or work
during odd hours.
The employer is not obliged
to offer work. But a person may
decline to work in a shift but
once accepted must carry out
the specified duties. Such jobs
are usually based on business
needs.
The employment will
terminate at the end of each
engagement but a person can
re-engaged as per the terms of
the employment agreement. In
addition, the following are the
basic rights of every worker:
minimum hours of work and
pay, paid bereavement leave,
terminate the employment by
short notice as per contract and
annual leave pay as part of the
wages.
However, such employees
are not entitled to redundancy
notice or compensation.
On-Call employees
On-Call employees have a
somewhat better status than
Casual employees, with an
ongoing relation with the
employer, but the hours of work
are not guaranteed.
Their working hours are
declared before the start of the
work;the roster can change
on short notice. Repeated non
availability may result loss in
the On-call status or termination
of employment. Such employees
are entitled to bereavement and
annual leave, in addition to pay.
Fixed-term Agreements
A Fixed-term Agreement is an
employment agreement offered
for a specific period of time.
The Employment Relations Act
(ERA) 2000 allows employers
to offer fixed-term agreements
under certain circumstances.
Such employment should
have genuine reasons such as
seasonal work, project work, or
where the employee is filling
in for a permanent employee
on leave. The employer should
also inform the employee of
the reasons, how or when
the employment will end.The
employee should agree to this in
their employment agreement.
Rights of illegal workers
An illegal immigrant worker is
also entitled to protection under
ERA.
A New Zealand Court ruled
thus on a case: “Although Ms
R did not hold a work visa
throughout her employment
at G workplace, the authority
commented that as a matter
of public policy, any employee
working in New Zealand,
irrespective of work visa status,
is entitled to the protection
under the ERA.”
The Immigration Act, administered
by Labour Department
under the Ministry of Business,
Innovation & Employment, not
only makes it an offence not
only to hire a worker without
a work visa but also deny
them minimum standards of
employment.
Although this may seem fair,
under the Immigration Act, it is
not an offence on the part of a
person to work without a visa.
The Act says that the migrant
worker must have a visa, but
does not provide any consequence.
The employer is bound
to pay such employee full wages
as well as holiday pay under the
law.
Leave and holidays
Most New Zealand workers
would tell you that they get a
good amount of leave, at least
by international standards. A
worker will get a minimum of
four weeks’ annual leave and
can ask to exchange one week’s
leave for cash. In addition, there
are 11 public holiday days.
If a student works on a public
holiday, the employer has to
pay them additional wages. The
employee will also be entitled
for a day off later. Every worker
is also entitled to sick leave
during a 12-month period.
Wages and deductions
The minimum wage for adults
is $15.25 an hour from April 1,
2016.Income tax is deducted at
source- this is known as PAYE
(Pay as You Earn) tax.
Another, much smaller,
deduction is the ACC (Accident
Compensation Corporation)
levy, which runs the insurance
system. Wages are usually
advertised as gross, before tax.
Every worker will need a tax
number known as IRD (Inland
Revenue Department) Number -
if you do not have one, you may
be taxed at a higher rate. It is
easy easy to get one right away.
Aside from PAYE tax and the
ACC levy, your employer is not
allowed to make any deductions
from your pay without your
permission.
Discrimination and
harassment
Discriminating against
someone because of the colour,
nationality or country of origin,
race, ethical belief, religion,
political opinion, employment
status, age or disability is illegal
in New Zealand.
Sexual harassment, including
requests for sexual contact
and any kind of offensive or
unwelcome sexual behaviour, is
also illegal here.
If you think you have been
discriminated against or
sexually harassed,you can
complain to higher authorities
at your workplace or the Labour
Inspectorate.
If you are not sure of your
rights or feel threatened, you
can seek free legal advice from
Citizens Advice Bureau nearest
to you.
The Ministry website (www.
employment.govt.nz) also
contains detailed notes on
rights and responsibilities of
employers and employees.
Gurjinder Singh is an
‘Enrolled Barrister & Solicitor
(NPC)’ based in Papatoetoe,
Auckland. He can be contacted
on (09) 2786580 or 021-2354969.
Email: gurjinder singh