Holidays Act Compliance
What is Holidays Act compliance and remediation?
Like many public and private organisations across New Zealand, Te Whatu Ora Te Matau a Māui, Hawke’s Bay (formerly HBHB) is impacted by Holidays Act 2003 compliance issues.
The Holidays Act 2003 covers pay and entitlements for employees in New Zealand about all types of leave and public holidays. While it’s easy to follow for those working standard hours, the Act has proved more complex for employees on shift work, variable days and hours, or with flexible work patterns.
This has resulted in widespread non-compliance – essentially, employers have unintentionally been underpaying or overpaying staff what they’re entitled to.
Since this came to light in 2015, it has affected a wide range of private and public organisations, including all district health boards.
Te Whatu Ora Te Matau a Māui, Hawke’s Bay has identified payroll-related issues and where the former DHB is not compliant. This has resulted in some staff receiving incorrect payments over time.
The issues relate to entitlements under the Holidays Act 2003. The specific areas requiring remediation date back to 1 May 2010. The issues are mostly related to the payment of statutory holidays, and annual, sick and bereavement leave etc.
In late 2016, DHB chief executives agreed to establish a national process to respond to concerns raised by the Council of Trade Unions (CTU), around levels of compliance of former DHB payroll systems with the Holidays Act 2003.
As well as development of a national process to manage Holidays Act Review and Remediation work, much work has been done to develop and agree a national interpretation of the Act for all former DHBs to adhere to.
What does this mean for you?
Right now you do not need to do anything. We will keep our current staff up to date. However, it should be noted that not everyone is affected. Holiday pay was calculated and paid correctly for some staff members.
Once we have rectified the system and any other areas in which we are non-compliant, we will look at Holiday pay calculations back to 1 May 2010, for both current and former Te Whatu Ora Te Matau a Māui, Hawke’s Bay (formerly HBHB) staff.
What is the agreed solution between DHBs and the unions?
The agreed solution between all DHBs and unions is to proactively make remediation payments to current and former employees to adjust for incorrect calculations going back to May 2010, and for future payments to be calculated and paid correctly.
What is the process?
DHBs will need to carry out three key stages to manage this issue, these are:
Review – This stage is complete. An independent external audit review process which identified the key areas of Holidays Act non-compliance was completed in August 2020. Ernst and Young completed our audit and produced Findings Reports for several other former DHBs.
Rectification – This stage is currently underway. This stage addresses areas of non-compliance found in the Review Stage. Non-compliance has come about from a complex mix of process, policy, practice and payroll system issues. This will look at what changes need to be made to ensure all of our system/s, policies and processes are compliant – and that Te Whatu Ora Te Matau a Māui, Hawke’s Bay pays their employees correctly going forward.
Remediation– This stage is currently underway. This stage is about calculating and paying anything that is owed to current and former employees arising from any identified areas of non-compliance, back as far as 1 May 2010. It should be noted that some employees may have been underpaid – and some may not. Not everyone will be owed money.
We are currently working out how big the issue is, how many staff across Te Whatu Ora Te Matau a Māui, Hawke’s Bay may be affected and what the timeframes will be for the remediation process
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