Holidays, leave and breaks
5 min read
Leave is a legal entitlement for employees in New Zealand, covering various types such as annual leave, public holidays, sick leave, parental leave, and breaks. This page details the guidelines for each type of leave, including eligibility, payment rates, and specific scenarios related to sickness or injury. It highlights the need to adhere to employment agreements and legislation, providing links to resources that help you calculate entitlements and stay informed about leave rights and obligations. Managing leave correctly fosters a positive workplace culture and ensures compliance with legal requirements.
Leave is a legal entitlement for all employees, so it's important to keep up to date with legislation.
An employee’s annual leave entitlement should be in their employment agreement. Ideally, every payslip will show a summary of the employees’ annual leave.
All employees are entitled to four weeks’ paid annual leave after each 12-month period of continuous employment with one employer, however many employers allow leave in advance.
For casual employees, annual leave may be paid on a pay-as-you-go basis at the rate of 8% of their earnings while employed.
Public holidays are different to annual leave. There are currently 11 public holidays in New Zealand. An employee does not have to work for their employer for a qualifying period before becoming entitled to public holidays. Working public holidays attracts different rates of pay and alternative days off.
Sick leave is for when an employee is genuinely ill or injured. It can also be used when the employee’s partner or a person who depends on them for care is sick or injured (such as their child or elderly parent).
The normal amount is 10 paid days per year (as of July 2021). An employee needs to have been employed for 6 months to qualify for paid sick leave. Unpaid sick leave or leave on ACC count as continuous service, therefore an employee still becomes entitled to annual leave and sick leave on their respective entitlement dates.
ACC will generally pay compensation for lost earnings after the first week off work. This applies to all injuries – work, home and sport.
If your employee is injured in a non-work-related accident, they should take sick leave for the first week off work. If they don’t have enough sick leave, you can both agree that the employee uses their annual leave instead. If this is also exhausted, the employee should take unpaid sick leave.
After the first week, and provided ACC accepts their claim, ACC will compensate the employee for 80% of their pre-injury income. This money is normally paid directly to the employee. An employee and employer can also agree that the employee can use one sick leave day a week to top their income up to 100%.
If an employee has a work-related accident, the employer has to pay 'first-week compensation' and cannot require the employee to take that time off as sick leave.
Extended time off work due to sickness or injury is a difficult situation for the employer and the employee. It must be managed carefully and in good faith.
Stay in regular contact with your employee about how they are doing and their prognosis for the future. Work with your employee and their health professional around a return to work or rehabilitation plan.
An employee may not be able to return to work full-time but perhaps they can manage reduced hours and/or light duties. Work helps the sick or injured employee get back to normal life - it provides social interaction and meaningful activity and it helps build an employee’s confidence and motivation. This has a number of benefits for the employer, including reducing costs, retaining an employee’s skills and experience, reducing lost work-time and promoting a positive and supportive workplace culture.
Generally, you are expected to keep an employee’s job open if they are absent due to sickness or injury. If an employee is off work for an extended period, it may be worthwhile employing someone on a fixed term employment agreement to cover their duties in the meantime.
An employer is not bound to keep an employee’s position open indefinitely. There comes a point where an employer can make the decision to dismiss the employee. This is called dismissal by reason of medical incapacity.
For further information on medical incapacity go to Employment New Zealand - Medical incapacity.
Sometimes a situation may arise when an employee is regularly but not continuously absent from work due to sickness or injury.
If an employee exhibits a pattern of regular weekly absences or frequently phones in sick on particular days, an employer may start to suspect the sick leave is not genuine. An employer has the right to request a medical certificate at any time. If you require a medical certificate within the first three days, you must inform your employee as early as possible and pay any reasonable costs associated with obtaining this certificate. These three days are consecutive and include weekends or nominated days off. After three consecutive days sick, the employee is responsible for meeting the costs of obtaining the medical certificate.
If you believe that an employee is misusing sick leave, it’s better to address the problem early through a performance management process.
If the sickness is genuine, work closely with your employee to find a way forward. For instance, can the employee reduce to part-time hours? Can they go onto light duties for a time? Good faith, common sense and open communication are all crucial here.
It is possible to dismiss an employee who is regularly absent from work due to sickness, provided the decision is both substantively and procedurally sound. Is this a decision that a fair and reasonable employer could have made given the circumstances? Because the employee is working at least some of the time, the test is very high. Please seek assistance from your lawyer or employer’s association.
Parental leave is available to employees in a number of situations, including when their baby is born, or if they take permanent primary responsibility for a child under six years old.
Normally, the employee will get some pay from the Inland Revenue Department (IRD) if they are off work on parental leave. The payment amount is different depending on the employee’s work circumstances, their pay rate, and the type of parental leave they are taking.
By law employees are entitled to paid rest and unpaid meal breaks and varies depending on the length of their working day (or work period). The employer must provide these breaks as a minimum entitlement.
Where rest or meal breaks would interfere with essential tasks, e.g., milking, an agreement to take the break when reasonably possible is recommended.
Annual leave can be taken at any time by mutual agreement between the employer and employee. Sometimes the timing of annual leave can be inconvenient, for example, a request for leave during calving. It’s best to sit down and try to find a solution together.
As an employer, you cannot unreasonably withhold consent to an employee's request to take annual holidays. However, the operational requirements of the farm would generally be considered reasonable grounds to withhold consent.
Generally, the timing of annual leave should be by mutual agreement, but in certain circumstances, you can force an employee to take annual leave with 14 days' notice. If you’d like your employee to take their annual leave within a certain timeframe, it’s best to sit down together and agree when annual leave should be taken.
Your employee can never lose their annual leave entitlement, they cannot forfeit it, nor does it expire. An employee’s annual leave entitlement remains in force until they either take it (as paid time off) or the leave is paid out (through cashing up annual holidays or at termination).
Work out how to calculate an employee's entitlements on resignation or termination.
Annual leave can be taken at any time by mutual agreement. While the amount of notice required is not specifically mentioned in the Holidays Act, it needs to be fair and reasonable. This varies depending on the workplace. Some businesses may be happy with a few days’ notice - others may require a few weeks’ notice.