New Zealand Labor Update: Public Holiday Entitlements; Day in Lieu

The Holidays Act 2003 (New Zealand) provides that an employee is entitled to another days holiday (a day in lieu) if a public holiday falls on a day that would otherwise be a working day for the employee and the employee works on any part of that day.

This seems simple enough, however, what can cause confusion, particularly for casual or rostered workers, is determining what would “otherwise be a working day” for an employee.

A recent Employment Relations Authority decision has addressed how Wendy’s have been determining what would “otherwise be a working day” for an employee and it has been determined that Wendy’s were illegally refusing to pay staff public holiday entitlements. Wendy’s considered that an employee was entitled to the day in lieu if they had worked that same day of the week over the three preceding weeks. McDonald’s and Restaurant Brands, which owns KFC, Pizza Hut, Starbucks and Carls Jr, use similar tests.

However, the Authority has determined that Wendy’s method of determining day-in-lieu entitlements by its three-week test is illegal and it must now consider the circumstances of each employee on a case-by-case basis. The ruling stated that “An individual employee approach is simply part of the price Wendy’s pays for the benefit of the convenience it gains by using variable rosters”.  

The Authority ordered Wendy’s to review all public holidays worked by all staff across all 23 stores since 1 July 2012 and credit anyone with a day in lieu if they should have been entitled to one, or pay them the dollar equivalent if they no longer work there.

By Quigg Partners, New Zealand, a Transatlantic Law International affiliated firm. 

For additional information about labor and employment law in New Zealand, contact David Quigg at newzealandlabor@transatlanticlaw.com. 

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