The Government’s overhaul of the Holidays Act promises fewer payroll headaches for industries with variable work patterns, like the Bay of Plenty’s horticulture sector.

This was a common theme of comments at Workplace Relations and Safety Minister Brooke van Velden’s forum with Employers and Manufacturers Association (EMA) members in Tauranga, on Thursday, November 13.

Van Velden announced Cabinet’s plan to replace the “broken” Holidays Act 2003 with the new Employment Leave Act in September.

Annual leave accumulation and sick leave entitlement calculation changes were among the key reform areas.

“The current Holidays Act attempts to provide one core system for all working arrangements, which has resulted in a lack of clarity for employers and payroll providers about which rules apply in which situations,” van Velden told the forum.

“Think of this system as an expansion and simplification of pay-as-you-go.”

For example, an hours-based accrual replaces the week-based entitlement system.

The new legislation will be introduced to Parliament in the new year.

Van Velden said if the bill passes into law, a 24-month transition period will allow payroll providers and employers time to make changes.

Changes to the Holidays Act bring a "clear regional benefit" to the Bay of Plenty. Photo / Bijou Johnson

She said there was a “clear regional benefit” to the Bay of Plenty.

The region has significant seasonal work industries, including in horticulture.

“Staff in those variable arrangements might benefit from having their hours written down.

“The huge benefit there is that you’ll have businesses in the local area that won’t have as high legal or remediation costs.”

Payroll manager at Te Puke kiwifruit and avocado packhouse Trevelyan’s, Julie Crane, described the current leave model as “clumsy”.

“The average person doesn’t understand it.”

Crane said horticulture companies have a range of contracts, including salary, permanent wage, fixed-term wage, casual and piece rates.

“We’re a seasonal town. In the kiwifruit season, you see people working 60-hour weeks, but in the off-season, they might do 40 or 50 hours. Contracts need to reflect that.”

Brooke van Velden with Employers and Manufacturers Association head of advocacy and strategy Alan McDonald at a members' forum at Trinity Wharf Tauranga on November 13. Photo / Bijou Johnson

When concerns were raised at the forum about employees using accumulated leave before the transitional period ends, Crane said the first problem was companies not managing leave.

“People should be encouraged or made to take leave. It’s not good business to let people accumulate leave. It’s a huge financial cost.

“By having a two-year transition, it gives people the opportunity to work on the excess leave balances with their employees and actually put rules in place.”

A forum attendee working in healthcare said there was “plenty of time” for businesses to consider how the new law would impact their employees before the transition period even started.

“It mostly comes down to your employment policies and how you’re applying those leave management policies within your organisation.”

EMA’s head of advocacy and strategy Alan McDonald advised employers to talk to their employees about how the changes affect them.

“As an employer, you’ve got that window to manage issues like a build-up of leave, managing additional hours, and setting your contracts so they reflect the actual working patterns rather than what you think they might do.”

Bijou Johnson is a multimedia journalist based in the Bay of Plenty. A passionate writer and reader, she grew up in Tauranga and developed a love for journalism while exploring various disciplines at university. She holds a Bachelor of Arts in Classical Studies from Massey University.