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.
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.
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
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