Annual leave with no pay
Auckland mother-of-one Tori Ramsay says she was horrified to discover that the value of her holiday pay had dropped significantly when she returned to work.
She took the Government entitlement of 26 weeks, plus one week for a premature birth, and returned to work five months ago.
But now she’s discovered the impact that time away had on her holiday pay entitlements.
If you’ve just returned from parental leave, a fishhook in employment law can mean you get paid very little annual leave payments – or nothing at all.
It works like this.
Your employer will pay out any holiday entitlement that accrued during your parental leave at whatever your average weekly wage has been over the previous 12 months.
That means you need to be back a work for a full year before any leave you take will be paid out at your full, normal rate.
Ramsay said she felt a drop in what she was getting in the weeks when she took leave but put it down to her husband’s fluctuating income. ‘‘I didn’t notice what was happening until I tried to do a budget and looked at my payslip.’’
She was getting paid leave days at a rate that was about half her normal pay.
‘‘It seems to have come about so employers don’t find themselves paying out leave to employees who wait until the last minute and decide they’re not returning to work and that’s fair enough, however it penalises those who do and while the employer could return their leave to the normal rate at their own discretion, they don’t have to and many don’t unless they have a union to reckon with,’’ she said.
‘‘I believe with a working new parent as our prime minister and all the changes being made that are supposed to help working parents, who can face a fair amount of adversity when trying to return to work, women in particular, to leave something as disruptive and unreasonable as this is backward and grossly unfair.’’
She has started a petition that she hopes to present to Government.
Other mothers agreed with her. Jess Young said her employer warned her that she should take her leave entitlement before she went on paid parental leave to stop it happening.
She said it was a problem. ‘‘In no other circumstances would anyone other than people taking paid parental leave be affected.’’
Annie Newman, assistant national secretary at E tu¯ , said it was a problem.
‘‘When you think from the perspective of a new mother returning to work, they haven’t been on holiday. They’ve been working. When they return to work there’s a new pattern that has to go into operation so they’re freed up to go to work, they need leave as much anyone.’’
She said there were extra costs for new parents, such as childcare, so they could not afford to take the leave at a lower, or no, pay rate. ‘‘They should be able to take time out on pay.’’
But employment lawyer Susan Hornsby-Geluk, of Dundas Street, said she did not think it was unfair. ‘‘It reflects the underlying principle of the Holidays Act that four weeks’ leave is earned after every 12 months of work.’’
She said leave that was accumulated and ‘‘banked’’ from earlier years of work would not be affected.
Bill Hodge, an employment law expert who is an honorary academic at the University of Auckland’s law school, said it was a situation of quid pro quo and it was not unreasonable to expect disruption to leave for the first year back after time off. The employer had already had to cope with the disruption of a worker being gone for up to 12 months, he said.
‘‘This is just the way the statute operates.’’
Gordon Anderson, who is chairman of the Holidays Act Taskforce, which is reviewing the law, said it was something the group had noticed.
‘‘The taskforce identified the relationship between the Holidays Act and parental leave as an issue at an early stage and this was noted in the issues paper publicly circulated by the taskforce in September 2018. The taskforce has considered public responses to that paper and any recommendations will be included in its report to the minister due at the end of this month.’’