True costs of Holidays Act to be revealed

Wednesday, July 21st, 2004

Stock Exchange disclosures to reveal true Holidays Act costs

Public companies racking up large, unbudgeted payroll costs due to the 'unintended consequences' of the Holidays Act may shortly have to alert the Stock Exchange with revised earnings statements, warns the Employers & Manufacturers Association (Northern).

But the biggest extra costs are likely in the public sector; health care, police and the Fire Service, the association says.

EMA says the official advice from the Department of Labour on the requirement to pay sick leave taken on a public holiday at time and a half is incorrect, and exacerbating a fraught situation.

"Some larger company members are reporting the extra costs of the new Holidays Act running to millions of dollars," said Alasdair Thompson, EMA's chief executive.

"The more generous they were to get people to work on public holidays, the more they find they now have to stump up. The double dipping has got to stop.

"Major businesses are telling us that if the Act is not sensibly fixed they will close down all work on public holidays and change rosters to eliminate any extra pay risk. This would be disastrous for employees' incomes. Many would lose 20 per cent of their annual pay.

"Though Labour Minister Paul Swain undertook to have the Act amended before Labour Weekend the review process seems to have got stuck.

"The EMA Board yesterday resolved the association should express its anxiety over progress in fixing the Act, and its concern that the review may not go far enough in addressing its perverse effects.

"No one intended that the Act would lead to exorbitant extra costs, the closing down of production, and restaurants, and widespread negative changes to work place practices.

"The present review is likely to deal only with pay at time and a half (on top of penal rates for work on public holidays) not the sick leave question.

"But businesses have told us sick leave has blown out four fold since the Act was introduced on April 1st.

"Some employees think they have a licence to take 'strategic' sick leave.

"It's no wonder when the advice from the Department of Labour is that sick leave on public holidays is entitled to be paid at time and a half on top of whatever penal rates they were previously paid. But the Act does not say that. The Department of Labour's incorrect advice on this is reflecting badly on the minister.

"These matters affect all enterprises operating more or less continuously, including health care, dairy, meat, other food processing, forest product operations, airlines, airports and ports and others.

"The impact of the sections of the new Holidays Act dealing with sick and bereavement leave, shift work, overtime and bonus payments is holding the economy back by reducing employee incomes as businesses cut back on work on public holidays, and as enterprises lose production time to avoid extra pay costs."

ENDS

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