The holiday season is a time for many of us to unwind, but if you’re a small business owner, the festive season can bring a level of stress. Many businesses in New Zealand go into hibernation over Christmas and New Year, with SEEK research finding that 40% of employees plan to take leave because their workplace will shut.
Whether you’ll be open for business or not, how can you confidently navigate what you can and can’t legally do over the holiday season? We spoke to Jaenine Badenhorst, an associate lawyer at Rainey Collins, to find out.
Can I insist employees use their annual leave over the holidays?
“Employers and employees should try and reach an agreement on when annual leave will be taken,” Badenhorst says. “However, an employer can require an employee to take annual leave at a particular time by giving the employee 14 days’ written notice.”
As an employer, you can also require an employee to take their annual leave at a particular time each year (such as over Christmas or an otherwise quiet time). This is known as a ‘closedown’ period.
“If you know that there will be a closedown period, this should be recorded in the relevant policy manual so that the employees can keep this in mind when they apply for annual leave at other times during the year,” Badenhorst says.
Can my employees use unpaid leave during a closedown if they don’t want to use annual leave?
If your workplace implements a closedown period, employees will be required to take leave, regardless of whether they have any annual leave accrued. “In these situations, your employees can be required to take unpaid leave provided that they are given at least 14 days’ written notice,” Badenhorst says. “You may also agree to let employees take annual leave in advance [to cover the closedown period] or allow some staff to come back to work earlier during the closedown period, but this is only practical where there is actual work for the employee to do.”
Can I legally require employees to work on public holidays?
All employees are allowed to have a paid day off on all the 11 public holidays in New Zealand. These are known as ‘statutory holiday days’ or ‘stat days’. However, if your business will be operating on a public holiday on which you are allowed to trade, and you need your employees, then you can require them to work. “A requirement to work on public holidays must be recorded in the employee’s employment agreement,” Badenhorst says.
“If you want your employees to work on a public holiday, but they are not required to work under their employment agreement, you can still ask them if they would like to work,” Badenhorst says. “The employee has a right to say no, and you cannot treat them adversely because they have turned down the offer of work.”
Do I have to pay employees extra on public holidays?
When an employee works on a public holiday, they will be paid their usual wage for hours actually worked plus half of their usual wage for the hours worked (often called ‘time and a half’). “The employee is also allowed to have another whole day off work that they would normally have been
required to work, even if they only work some of their usual hours on the public holiday,” Badenhorst says. “This is commonly known as ‘day in lieu’ and is paid at the employee’s relevant daily rate.”
If a public holiday falls on a day on where the employee is already on annual leave due to the closedown period, that day doesn’t count as an annual leave day (provided that it would have been a normal working day for the employee if there was no closedown).
“It can be tricky to work out exactly what an employee should be paid for a day of leave or on a public holiday, especially if they have irregular hours, or if they are on salary,” Badenhorst says. “We recommend that employers make use of payroll companies to avoid getting things wrong.”
What if an employee doesn't want to work on a public holiday?
“An employee who is not required to work on a public holiday, due to their employment agreement, can decline to work,” Badenhorst says. “They will still get paid their normal wage, as if they worked that day.”
If you want an employee to be on standby just in case they’re needed on a public holiday, then there must be an availability clause in the employee’s employment agreement. “An availability clause requires the employee to accept work on a public holiday if work is offered,” Badenhorst says. “Without an availability clause, the employee can turn down any work offered on a public holiday.”
It’s important to know that employers have to pay an employee for making themselves available, even if they are not needed. “This can be a good option for businesses that cannot easily predict their staffing needs on a public holiday and want to ensure they have staff on standby,” Badenhorst says.
What happens if a public holiday falls on a weekend?
If a public holiday falls on a weekend and that day would ordinarily be a working day for the employee, then that day is treated just like any other public holiday.
However if a public holiday falls on a weekend, and the employee does not normally work on weekends, then the employee’s public holiday entitlement will move to the following Monday. Badenhorst recommends that employers use this flowchart to help them understand employee entitlements for public holidays.
Preparing your business for the holiday season means being aware of your legal responsibilities to your employees. Knowing what this means for your business can help to ease the stress of the season.
If you’d like to learn more about staffing and shutting down over Christmas and the New Year, you can find more information here.
NZ Source: Independent research conducted by Nature on behalf of SEEK. Interviewing 4000 Kiwis annually
Information provided in this article is general only, does not constitute legal advice and should not be relied upon as such. SEEK provides no warranty as to its accuracy, reliability or completeness. Before taking any course of action related to this article you should make your own inquiries and seek independent advice (including the appropriate legal advice) on whether it is suitable for your circumstances.