It's about time – review of the Holidays Act announced

This week it was announced that a Holidays Act Working Group has been established to conduct a full review of the Holidays Act 2003 (the Act). Here's what you need to know:

Why?

There is widespread non-compliance with the Act and it is generally accepted that this is due to issues with implementation of the legislation in payroll systems, and issues with the legislation itself. The result is that employers are uncertain of their obligations and many employees are not receiving their correct entitlements.

What?

The Group aims to produce a new, or significantly amended, piece of legislation that is easier to use and is designed with the future labour market in mind.

In particular, the Group will develop, test and make recommendations to the Government on the provisions of, and payment for, holidays and leave entitlements.

The Group’s aim is to:

  • make the legislation simpler, clearer and more certain;
  • make holiday and leave entitlements more readily applicable to the increasingly diverse range of working and pay arrangements; and
  • make the legislation more readily implementable by payroll systems.

The purposes of the current Act and (at least) the current levels of entitlements will be retained. The Group will not consider the complex issue of remediation of historical underpayments under the Act.

How?

The Group will work with technical experts (including payroll providers) to assist with the design and testing of policy options. The Group is required to support its recommendations with quantitative analysis and testing using real payroll data, to ensure the options are in fact readily implementable.

Who?

The Group will be made up of employer, worker and government representatives. Gordon Anderson, a law professor at Victoria University, will be the independent chair of the Group.

When?

The Group will report back to the Minister of Workplace Relations and Safety within the next 12 months and an interim report on the Group’s progress will be provided in six months. It is likely to be two to three years before any new legislation is passed.

What about the meantime?

In the meantime, employers will need to consider how to best meet their obligations under the current Act. This may mean investing in new payroll systems or managing issues with current systems through manual fixes. The Labour Inspectorate will continue their programme of audits and investigations, and unfortunately the well-known fact that the current Act has issues is no defence to non-compliance.

Who can help

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