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Holidays Act 2003. Justice icon

Holidays Act 2003

The Holidays Act 2003 (the Act) is the fundamental piece of legislation outlining leave entitlements for employees. This Act aims to legislate a balance between work and other aspects of the lives of employees.

It is important for employers to know that whether an employee is full-time, part-time, fixed term or casual, they are entitled to some form of annual leave or holiday.

What is in the Holidays Act 2003?

As an employer, it is important to understand the leave entitlements outlined in legislation, and how to ensure you are accurately complying with these requirements. The Act outlines that:

  • accurate records must be kept for all employees of hours worked, the pay for these hours, and the details relating to any leave taken
  • all employees are eligible to take annual holidays when they have completed 12 months of continuous employment for an employer
  • employees are also entitled to sick and bereavement leave
  • employees are entitled to a paid day off on a public holiday, if they would normally work on that day, or payment at a rate of time and a half should they actually work on that day

What are employees entitled to under the Holidays Act?

Under the Act, employers must extend a minimum amount of annual leave to employees in addition to paid public holidays, sick leave and bereavement leave.

Below are the specific minimum entitlements based on legislation:

  • four weeks of paid annual leave after every 12 months of continuous employment for the same employer
  • at least 11 public holidays. If necessary, the employee can agree to transfer the observance of a public holiday to another working day to meet the needs of the business, if both parties agree
  • at least five days’ paid sick leave after six months of continuous employment and another five days’ sick leave for each 12 month period after that

Are holiday entitlements the same for casual employees?

Casual employees may also receive entitlements if they work on public holidays.

However, when it comes to holiday pay, casual employees can instead receive this entitlement as a regular component of their pay. This should be agreed in the employment agreement, should be paid at a rate of at least 8% of their gross earnings, and should be a separate and identifiable component of their pay.

To gain access to sick leave and bereavement leave, at the point the leave is requested, the casual employee must have worked at least an average of 10 hours per week in the 6 months immediately prior, with one hour worked in each week, or 40 hours worked in each month.

Otherwise working days (OWDs)

The Act provides employees with public holiday entitlements if the public holiday falls on a day the employee would otherwise be working. If an employee is full-time or part-time, determining an OWD is usually simple, as their work pattern or roster makes it clear the exact number of days and hours they work each week.

It can be difficult for employers to calculate OWDs for casual employees, or employees whose days of work vary, and the legislation is not completely clear on how this can be done.

If a work pattern is unclear and it is difficult to determine an OWD, the Act requires an employer to consider factors that are relevant to the employee’s situation. These include:

  • terms of the employment agreement
  • the employee’s work pattern
  • whether or not work is readily available
  • a pre-defined roster or informal schedule
  • the expectation from the employer and employee that the employee would work on the day the public holiday falls

As each employee has different work patterns, rosters and employment agreements, employers must work closely in good faith with the employee to reach a fair agreement.

For advice on calculating OWDs, or assistance with understanding the Holidays Act 2003, contact Employsure on 0800 675 700.

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