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As we draw closer to the end of the year, employers are faced with the challenge that is the Holidays Act 2003 and determining their employee’s leave and holiday entitlements during the festive season. While we await proposed changes to this tricky law, for now, we cover key need to know tips on the Holidays Act 2003 and the coming holiday period.

Closedown

If your business operates a closedown period, and your employment agreements includes a clause explaining this, employees can be required to use annual holidays or take unpaid leave during your closure.  Closedown periods are available to employers provided they are “customarily” used, and employees are given at least 14 days’ notice of the dates of this. A business can only have one closedown period a year.

Annual holidays: Employees who are entitled to annual holidays, can be required to take these with 14 days’ notice, if agreement as to the timing of holidays cannot be reached.

Public holidays: Employees are entitled to be paid for any public holiday, even if they don’t work that day, if it falls on a day that would have ‘otherwise been a working day’ (OWD) for them.

The following public holidays, which all fall on weekdays this year, will be observed during the festive season:

Christmas Day Wednesday 25 December 2024
Boxing Day Thursday 26 December 2024
New Year’s Day Wednesday 1 January 2025
Day after New Year’s Day Thursday 2 January 2025

Where an employee works on a public holiday, they must be paid at the employee’s ordinary pay plus half that amount again for time worked, and if the public holiday is on an OWD, they will also be entitled to a full day alternative holiday.

What is an OWD?: Not sure if your employee would have otherwise been working?  The Holidays Act 2003 lists factors to consider including, what the employment agreement states, what the work patterns are, any rosters or systems in place, whether the employee works only when work is available, and the reasonable expectations of the parties. An OWD may vary between employees, therefore employers will need to review each employee’s situation practically.

On call on public holidays: If an employee is on call on a public holiday, on an OWD and is called out, they will be entitled to a full day alternative holiday.

If an employee is on call on a public holiday, on an OWD, and is not called out, they will be entitled to a full day alternative holiday if they have not practically had a holiday on that day because of the restrictions imposed by their being on call.  Determining this will involve considering what the employee is practically required to do to remain available to attend call outs during the day.

Alternative Holiday

If an employee is required to work on a public holiday, they will be entitled to a whole day off (alternative holiday). The purpose of an alternative holiday is for an employee who has worked a public holiday to have a day off in lieu as compensation for working on a public holiday.

An employee can take payment (cashing up) for an alternative holiday but only after 12 months of being entitled to it. Cashing up an alternative holiday before the 12 months of entitlement will not comply with the provisions of the Holidays Act 2003.

Transfer of public holidays:  Employers can agree in writing with employees to transfer any public holiday to another day. The new date cannot be another public holiday and must be an OWD.

Message for Employers

If you would like advice regarding public holidays, annual holiday entitlements or closedowns please contact our team.

Disclaimer: We remind you that while this article provides commentary on employment law, health and safety and immigration topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer for any questions specific to your workplace.