Public Holidays - to Pay or not to Pay
Public holidays are in addition to annual holidays and there is no minimum period of time an employee has to be employed to get public holiday benefits, as the case with annual and sick leave entitlements.
There are 11 public holidays, also known as statutory or ‘stat’ holidays. These public holidays are provided for under the Holidays Act 2003, section 44. All employees are entitled to public holiday benefits whether they are part-time, full-time, fixed-term or ‘casual’ employment agreements.
This public holiday entitlement, becomes available when the public holiday falls on a day that would otherwise be a working day for the employee. Determining if a day would otherwise have been a working day for the employee, is therefore the most important step in determining if an employee is entitled to public holiday payment or not. To determine this, we have to look at all the following guidelines to get to a dominant impression;
- What the employment agreement says;
- The employee’s usual work patterns;
- Other relevant factors such as:
- If 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 the employee as to whether the employee would have worked on that day.
- If the employee would normally have worked if it wasn’t a public holiday.
Herewith then a few examples that might be of assistance:
- Should an employee be employed to work two days a week and the days are fixed or specified as Monday and Tuesday, and a public holiday comes along on the Wednesday – the employee is not entitled to payment, as Wednesday is not considered to be a working day for the employee.
- Same scenario as above, but the public holiday is on a Tuesday – the employee will be entitled to payment as a Tuesday is considered a working day for the employee.
- Should a casual employee have been scheduled to work on a specific Monday and it happens that this specific Monday is a public holiday – the casual employee would be entitled to payment as the Monday would have been a working day for the employee.
- An employee is employed to work 20 hours a week, these hours can be worked on any day but must calculate up to 20 hours at the end of the week. Here we have to consider the working pattern of the employee to determine his/her entitlement. Case law guides us on this point, saying you have to go as far back as 12 months to determine a pattern.
When a public holiday falls on a Saturday or Sunday and the employee does not usually work on those days, the public holiday is Mondayised or Tuesdayised, meaning the employee’s public holiday which falls on a Saturday or Sunday is moved to the following Monday or Tuesday. Mondayisation only happens if the employee doesn’t normally work on the calendar date of the holiday. If an employee normally works on the day of the public holiday’s calendar date, then there is no Mondayisation for them and their public holiday benefits apply to the calendar date.
If an employee would normally work on both the calendar date of the public holiday and the possible mondayisation date, their public holiday is on the calendar date. They don’t get two public holidays.
When an employee does not have a clear work pattern or there is a lot of variation in work times, it may be hard to decide if they would have normally worked on a Saturday or Sunday that a public holiday falls on. You can use the step above, described for determining otherwise working days, to help you work it out.
If a business has a close-down period that includes public holidays, for example, over the Christmas and New Year period, then the employee is entitled to a paid public holiday if they would have normally worked on that day if the close-down was not in effect.
If an employee is on annual leave when there is a public holiday, they get a paid public holiday if they would have normally worked on that day, and do not lose an annual leave day.
If an employee is on parental leave and a public holiday falls within that leave, the employer does not have to pay for the public holiday because the employee would not have normally worked on that day.
When an employee would have worked on a public holiday but is sick or bereaved, the day is treated as a paid unworked public holiday and:
- the employee would be paid their relevant or average daily pay, but would not be entitled to time and a half or an alternative holiday
- no sick or bereavement leave is deducted.
Each employee can get a maximum of 11 public holidays a year, for example:
- if a public holiday is Mondayised, they can’t claim two public holidays - one for the actual date and one for the Mondayised date
- if the employee is usually based in Auckland, but is temporarily based in Wellington, the Anniversary Day to be observed is a matter to be agreed by the employer and the employee, but they can only claim one Anniversary Day per year.
- an employee can’t be entitled to more than four public holidays over the Christmas and New Year period, regardless of their work pattern.
What an employee gets for a public holiday depends on:
- whether or not they actually work on the holiday or on the day the public holiday has been transferred to, and
- whether or not the day is a day they would otherwise have worked were it not for the fact that it was a public holiday.
An employee can only be made to work on a public holiday if:
- it falls on a day that they would have otherwise worked on, and
- their employment agreement says they have to work on the public holiday.