In brief: update on holiday pay and contractor’s rights

Tourism Holdings Limited operates a tour bus business throughout New Zealand called Kiwi Experience. A dispute has arisen about how to calculate holiday pay for the company’s drivers.

This case has been granted leave to appeal to the Court of Appeal on the following issues:

• The meaning of ‘not a regular part of the employee’s pay’ under s8(1)(c)(i) Holidays Act 2003 (HA) for the purpose of calculating ordinary weekly pay under s8(2) HA; and

• Productivity or incentive-based payments being a regular part of the employee’s pay and whether those payments had to be ‘pay the employee receives under his/her employment agreement for an ordinary working week’ for the purpose of calculating ordinary weekly pay under s8(2) HA.

We look forward to reporting back to you on where the Court of Appeal lands in relation to this important area of Holiday Pay.

Contractor’s review

Last week, the Government released a discussion document Better Protections for Contractors. The primary purpose is to open up discussion on how to improve the rights and protections for vulnerable contractors. Under the co-ordination of the Ministry of Business, Innovation and Employment (MBIE), the government wants to ensure all workers in New Zealand have access to proper work with at least minimum standards and conditions.

Arguably, too many contractors are in fact operating as employees, however are barred from receiving all the entitlements and benefits of an employee. Employers instead are keeping these workers at an arm length, under the title of an ‘Independent Contractor’. Subsequently, there are workers who fall in the ‘grey zone’ between employee and contractor status; again raising uncertainty about entitlements, obligations and benefits owed.

The need for change has been grouped into four main classifications:

• Deter misclassification of employees as contractors.

• Make it easier for workers to access a determination of their employment status.

• Change who is an employee under New Zealand law.

• Enhance protection for contractors without making them employees.

Public consultation is now open and will close at 5pm on 14 February 2020.

Any questions?

Please contact a member of our workplace law team if you have questions about how you are calculating holiday pay or are currently treating contractors in your workplace.

Workplace Law team

Employment: Andrew Shaw, Fiona McMillan, Gwen DrewittMaria Green,  Hannah Martin, Joseph HarropHolly StruckmanAlex Beal, Giuliana Petronelli, Abby Shieh
Immigration: Mark Williams, Rachael Mason, Daniel Kruger, Nicky Robertson, Julia StrickettKen Huang, Mary Zhou, Shi Sheng Cai (Shoosh)Sarah Kirkwood, Janeske SchutteLingbo Yu
ACC: Andrew Shaw
Health and Safety: Andrew ShawFiona McMillan

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