Government announces Holidays Act 2003 consultation

05 June 2024

The Minister for Workplace Relations and Safety has released a statement today tackling Holidays Act reform. Whilst the statement does not set out a full plan, it does flag some important next steps and signals that there will be material differences from the Taskforce’s 2021 proposals:

  • The Government will prepare an exposure draft on the Holidays Act Bill for the purposes of consultation.
  • The Government will conduct a targeted consultation with businesses and key stakeholders on the exposure draft in September 2024.
  • The exposure draft will include a change in how annual leave is granted, moving from an entitlement system to an accrual system. The aim of this change is to simplify calculations for payroll systems.
  • The exposure draft will include a proposal to pro-rate sick leave based on an employee’s working hours.

The pitfalls in the current Holidays Act are many and varied. A comprehensive reform and changes to the Taskforce’s original proposals is likely to be welcomed by the overwhelming majority of employers. In particular, the Government’s proposal to move to a simplified annual leave accrual system has the potential to cut down on a number of pay roll system errors that we routinely see and align the legislation with modern pay roll systems.

The Government has invited key stakeholders to register their interest to participate in the targeted consultation with MBIE by 8 July 2024. This is an important opportunity for employers to have their say on Holidays Act reform. The Government is looking to receive varied feedback from across the board. We recommend that employers of all sizes and sectors register to ensure that they have a say in this important reform. We intend to register Chapman Tripp’s interest in the consultation process too.

If you would like us to assist in putting together feedback for your organisation, please do not hesitate to get in touch.

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