Source: EMA
The return of the Employment Leave Bill from select committee marks another important step towards delivering a simpler and more consistent approach to holiday and leave entitlements, says the EMA.
The select committee has now reported back on the Bill, with only minor amendments recommended. The key changes supported by the EMA, including the move to an hourly accrual system for leave calculations, remain unchanged.
The Bill will now proceed through its second and third readings in Parliament. The Government has signalled its intention to pass the legislation before the election in November.
EMA Head of Advocacy and Strategy Alan McDonald says the Bill addresses long-standing issues that have created uncertainty for employers and employees.
“The Holidays Act has been difficult to apply in practice for many businesses. That has resulted in backpay liabilities ranging from thousands to tens of millions of dollars,” McDonald says.
“The return of the Bill from select committee is a significant milestone. While some minor changes have been made during the select committee process, the core reforms remain intact and bring us another step closer to a system that is easier to understand and implement.
“That will help lift confidence for both employers and workers.”
A key feature of the Bill is the shift to an hourly accrual system for calculating leave.
“We have consistently supported an hours-based accrual model,” McDonald says.
“Linking leave to the hours actually worked is a straightforward and transparent way to ensure entitlements are calculated correctly.”
The EMA says this approach is particularly important for part-time and variable-hour workers.
“An hourly system creates a more balanced and consistent framework across different working arrangements,” McDonald says.
The EMA also supports changes to how sick leave entitlements are applied. Previous settings, introduced during the Covid period, have placed financial and operational strains on employers, particularly small and medium-sized businesses.
“Aligning sick leave with hours worked supports a fairer outcome across the workforce,” McDonald says.
The Bill includes a transition period of up to two years after enactment to allow businesses time to adjust.
“Employers will need time to update payroll systems, review employment agreements and ensure they are applying the new rules correctly,” McDonald says.
“Businesses need rules they can apply with confidence, and employees need to trust their entitlements are right.”