Unions and Labour argue holiday changes unfair

Helen Kelly says the changes would leave workers worse off. Photo / Mark Mitchell

Unions and the Labour Party have reacted angrily to a Government decision to allow workers to cash in their fourth week of holidays.

Prime Minister John Key announced the Government policy among other employment reforms in July last year and since then a review of the Holidays Act has been done. Though the report has yet to be made public, a copy was leaked to the Sunday Star Times.

The review team was divided over its recommendations but Labour Minister Kate Wilkinson told the newspaper legislation would go to Parliament early next year making several changes.

Council of Trade Unions President Helen Kelly said those changes - which included altering how different types of leave were calculated and the option of taking public holidays on alternate days - would leave workers worse off, with fewer holidays and reduced leave pay.

Calculating holiday pay was a complex process, and what might look like simplifications to the system could mean reduced pay for workers. Workers whose hours increased during the year would be worse off, she said.

Another change could see sick leave changed modified from five days a year, to 40 hours a year.

"This looks simple enough but would reduce sick leave days to workers that work part-time or longer shifts than eight hours," she said.

"The risk is that because this is a technical issue, the Government makes changes that workers only understand when they run out of sick leave and holidays unexpectedly."

Labour MP Darien Fenton said the review was a sham, with outcomes predetermined.

"I'm not sure why the Government even bothered to ask people to submit on cashing up a fourth week's leave when it was obvious they were going to do it anyway," she said.

"But even worse, the Government has taken the opportunity to add on a whole set of other changes, which were not signalled by National at the last election."

Ms Wilkinson said safeguards would prevent workers being forced to take cash instead of holidays.

"This is about choice for that one week of the four weeks," she said.

Employers would not be allowed to raise the cash-in at job interviews, for example.

She said the changes were needed because the system was too confusing and the courts even struggled with employment cases.

"We are not reducing entitlements. We think the new formula for relevant daily pay will be easier to calculate. We also think it will be fairer to employees and employers and prevent the gaming of relevant daily pay calculations."

- NZPA