Annual Leave Remediation

If you think you are entitled to a repayment please fill in our Contact Details Form & submit it to ALRemediation@ngahuiagroup.nz so we can investigate your request.

The Holidays Act 2003 was established to promote a healthy work/life balance for all employees working in New Zealand and to provide for minimum holiday entitlements. The Act sets out how employers should pay their employees for annual leave, public holidays, sick leave, alternative holidays, bereavement leave and more recently the new family violence leave. All New Zealand employers must comply with the Holidays Act.

Background

As you may be aware, over the last few years an issue arose regarding New Zealand businesses and the application of the Holidays Act 2003. It came to light when big organisations like the New Zealand Police and Government departments (including the Ministry of Business, Innovation and Employment itself) identified issues within their own organisations.

It is now known that this is an issue which has impacted most employers in New Zealand and is due to the complexity of the legislation. In response, the Government set up a Tripartite Task Force to review the Holidays Act with a view to simplifying it.

NGL Review

Over the last 24 months, we have been reviewing whether our payroll system has been applying the correct interpretation of the Holidays Act 2003, with the support of external independent advisors from MERW (legal), as well as the Labour Inspector from the Ministry of Business, Innovation and Employment (MBIE) and our payroll provider, Fusion 5.

As a result of this review, we have identified that our system setup for some leave payment calculations has previously been non-compliant with the Act. The general areas of non-compliance identified relate to the following:

Payment calculation for annual holidays; and
Payment calculation for bereavement leave, alternative holidays, public holidays and sick leave.

Who has been impacted?

Employees that may be affected are those who were/are employed by Ngahuia Group (R Hannah & Co and Number One Shoes) between 07 November 2012 to 20 January 2021 . We have reviewed all payments processed back to 2012 and we have identified employees who are owed a remediation payment.

The most common reasons for the errors involve people with variable hours of work vs. contracted hours i.e. allowances, changes in the number of hours worked etc. Most employees who have a pay that does not change each period are, in the most part, not impacted.

In some situations, employees taking leave may have been paid more than they were entitled to. We will not be seeking any repayment from employees for any leave we have overpaid.

What Action Have We Taken?

When we were made aware of the issue, we voluntarily commenced our own investigation and analysis. We subsequently agreed a plan of action with MBIE (called an Enforceable Undertaking).

Along with support from MBIE, we have reviewed all payments processed back to 07 November 2012 and have identified employees (both current and past) who are owed a remediation payment.

We have worked closely with the Labour Inspector (MBIE), MERW and our Payroll provider – Fusion 5, to ensure our systems and processes moving forward are robust and to ensure we comply with the Holidays Act.

The Labour Inspector from MBIE has signed off our remediation methodology, process and recalculations.

Through this extensive piece of work, we are confident that the remediation calculations and system/process improvements fully remedies all issues.

Our Payroll system was updated as at 14 January 2021 and we are now able to ensure that our people, historically and currently, receive the minimum entitlements when they have taken or take annual holidays or other leave types.

How will I know if I have been impacted?

NGL has conducted a holiday pay remediation audit and has developed a list of employees (both current and past) who have been affected. We will make best efforts to contact all past employees who we have identified as being impacted.

If you worked for R Hannah/Number One Shoes between 07 November 2012 to 20 January 2021 on variable work patterns, there is a chance you may be entitled to a repayment. We encourage you to complete the Contact Details Form so we can investigate your request.

Affected people will receive a letter from the People & Culture Team with information about their payment and what to expect.

Frequently Asked Questions

We have worked closely with MERW, Fusion 5 and a Labour Inspector from the Ministry of Business, Innovation and Employment (MBIE). The team have documented all issues, remediation steps and methodology. This has all been reviewed and our re-calculation process has been approved by the Labour Inspector assigned to NGL to complete this work.

Generally, employees who have worked a standard number of hours and days per week (i.e. no variability in their pay) will not be affected. The most common reasons for error involve people with variable hours of work (i.e. allowances, regular changes in the number of hours worked etc) vs contracted hours. Most employees who had a pay that did not change each period will in the most part be unaffected.

We are required to go back six years from the date detailed by MBIE (07 November 2012). We commenced discussions with MBIE in 2018, therefore, calculations will range from 07 November 2012 to 20 January 2021 or from when an employee commenced employment with Ngahuia Group, whichever is the earliest date.

Affected people will receive a letter from the People & Culture Team with information about their payment and what to expect. If you have not received any communication from Ngahuia Group but have reason to believe you are entitled to a repayment, we encourage you to complete the Contact Details Form so we can investigate your request. Communication expected from 11 May onwards.

We will attempt to contact past employees by email and/or letter using the contact details we have on our records, as well as requesting any current team members that may be in contact with past employees to direct them to our Number One Shoes and Hannahs site. All past employees will need to provide updated information about bank account, tax codes, student loan, KiwiSaver etc by completing the form below and returning it to ALRemediation@ngahuiagroup.nz. Once received we will process any required remediation as soon as possible. You will also need to provide a copy of your driver license or passport so that we can ensure we are making payment to the correct person and to minimise the risk of fraudulent activity.

Earnings history and leave patterns are unique, so each employee will be assessed individually and each payment amount will be different. Please note: Some employees will receive a letter indicating they are owed a very small payment amount and may question why we have issued the letter. Under the Holidays Act, we are obligated to pass on all monies owing, no matter how small the value is (i.e. some values may be as small as $0.01).

Interest is not paid on any remediation payment. Several factors have been considered in deciding whether it was appropriate for Ngahuia Group to pay an additional amount in the form of interest or compensation. These factors included the following: • It would not be fiscally responsible for Ngahuia Group to pay interest or compensation. • Ngahuia Group are not legally obliged to pay interest or compensation in this situation. • Where possible, when reviewing historical data, assumptions have been made in favour of the employee or the most generous method of calculation has been used.

Yes, we have identified some employees who have been overpaid. However, Ngahuia Group has decided there will be no action to seek recovery of overpayments.

All remediation payments will be taxed as a lump sum payment as per Inland Revenue guidelines. The payment is taxed at the current tax rate and reported to Inland Revenue as earnings for the current tax year. We will be asking all past employees to confirm which tax rate they want to be applied to their remediation payment. (along with confirmation of KiwiSaver deduction rates) The Inland Revenue website has useful information on the tax treatment of lump sum payments such as an arrears payment. We encourage you to contact the relevant organisation such as Inland Revenue for advice about whether your remediation payment affects any agreement you have with them about your current earnings, benefits, child support or any other matters. You can also contact the IRD directly on 0800 775 247.

No - the guidance from Inland Revenue is clear on this. Backdated remedial payments are taxed at the current tax rates and reported to Inland Revenue as income in the current tax year. We are not able to record your payment against another tax year or years.

KiwiSaver contributions (i.e. employee and employer where applicable) will be deducted as per the details you provide on the remediation form, from any remediation payments as per normal payroll processing.

Please email us at ALRemediation@ngahuiagroup.nz with details of the deceased employee and we can provide further details regarding what is required.

If you have updated your contact details or moved house since leaving Ngahuia Group please feel free to provide us with your updated contact details by emailing us at ALRemediation@ngahuiagroup.nz . This will ensure we can contact you easily when we are ready to send a communication to you. We will only collect and use your personal information for the purposes of settling any payment under the Holidays Act remediation.

I think I am entitled to a repayment and have submitted a contact us form. If I am entitled to a repayment, when will this be paid out?

Due to the number of individual requests coming through, we will be paying ex-employees who have applied for a payment in batches. We will advise of the repayment date at the time of application and confirmation of each individual.

Where can I read more about this issue?

Ministry of Business, Innovation and Employment (MBIE) - View Website

Who do I contact for further information?

If you have any further questions, please feel free to contact us at ALRemediation@ngahuiagroup.nz.