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employment

"Alternative holidays" (Days in lieu): How they work

Key Takeaway

Alternative holidays, also known as days in lieu, are an entitlement for employees in New Zealand who work on a public holiday that would otherwise be a working day for them. This provides an additional paid day off, separate from the payment received for working the public holiday itself, which is typically at time and a half.

Understanding Alternative Holidays in New Zealand

Alternative holidays, often referred to as days in lieu, are a specific entitlement under New Zealand employment law provided to employees who work on a public holiday. This entitlement ensures that eligible employees receive both additional pay for working on a public holiday and an additional paid day off to be taken at a later date.

What is an Alternative Holiday?

An alternative holiday is a paid day off granted to an employee who works on a public holiday that would have otherwise been a working day for them [Source: Holidays Act 2003, s 58(1)]. This entitlement is separate from, and in addition to, the payment the employee receives for working on the public holiday itself [Source: Holidays Act 2003, s 58(2)]. Typically, an employee working on a public holiday is paid at least time and a half their ordinary rate for hours worked [Source: Holidays Act 2003, s 60(1)(a)].

Eligibility for Alternative Holidays

An employee is entitled to an alternative holiday if they work on a public holiday and that public holiday is a day they would "otherwise work" [Source: Holidays Act 2003, s 58(1)]. The term "otherwise work" is defined by several factors, including:

  • The employee's normal working patterns [Source: Holidays Act 2003, s 12A(1)(a)].
  • The days of the week the employee works [Source: Holidays Act 2003, s 12A(1)(b)].
  • The employer's rosters or work schedules [Source: Holidays Act 2003, s 12A(1)(c)].
  • The employee's terms of employment [Source: Holidays Act 2003, s 12A(1)(d)].
  • The practices of the employer's business [Source: Holidays Act 2003, s 12A(1)(e)].
  • The employee's expectations and the employer's expectations about working on the public holiday [Source: Holidays Act 2003, s 12A(1)(f)].

If the public holiday falls on a day that would not otherwise be a working day for the employee (e.g., their regular day off), then they are not entitled to an alternative holiday, even if they agree to work on that public holiday [Source: Holidays Act 2003, s 58(3)]. However, they would still be entitled to penal rates of pay for working on the public holiday [Source: Holidays Act 2003, s 60(1)(a)].

Taking an Alternative Holiday

The employee and employer must endeavour to agree on when the alternative holiday is to be taken [Source: Holidays Act 2003, s 61(1)]. If an agreement cannot be reached, the employer may specify a date for the alternative holiday, provided they give at least 14 days' notice [Source: Holidays Act 2003, s 61(3)].

An alternative holiday must be taken on a single day [Source: Holidays Act 2003, s 61(2)]. An employer cannot require an employee to take an alternative holiday on a public holiday [Source: Holidays Act 2003, s 61(4)]. Alternative holidays accumulate and can be carried over; there is no maximum number of alternative holidays that can be accrued [Source: Holidays Act 2003, s 64(2)].

Payment for Alternative Holidays

When an alternative holiday is taken, the employee must be paid their "relevant daily pay" for that day [Source: Holidays Act 2003, s 62(1)]. Relevant daily pay is the amount of pay that an employee would have received if they had worked on the day on which the holiday is taken, including any regular allowances and payments [Source: Holidays Act 2003, s 9(1)].

If it is not possible or practicable to determine an employee's relevant daily pay, or if the employee's daily pay varies, then the employee must be paid their "average daily pay" [Source: Holidays Act 2003, s 9A(1)]. Average daily pay is calculated based on the employee's gross earnings over the 52 weeks before the alternative holiday is taken, divided by the number of days they worked in that period [Source: Holidays Act 2003, s 9A(1)].

Employer and Employee Obligations

Employer Obligations:

  • To accurately determine if a public holiday is an "otherwise working day" for an employee [Source: Holidays Act 2003, s 12A, s 58].
  • To grant an alternative holiday to eligible employees [Source: Holidays Act 2003, s 58].
  • To pay the employee at least time and a half for working on the public holiday [Source: Holidays Act 2003, s 60(1)(a)].
  • To keep accurate records of alternative holidays accrued and taken [Source: Employment Relations Act 2000, s 130].
  • To endeavour to agree on the timing of the alternative holiday with the employee [Source: Holidays Act 2003, s 61(1)].

Employee Obligations:

  • To endeavour to agree with the employer on when an alternative holiday will be taken [Source: Holidays Act 2003, s 61(1)].

When to Seek Independent Legal Advice

If an employee or employer has specific questions about their entitlements or obligations regarding alternative holidays, or if there is a dispute that cannot be resolved directly, they should seek independent legal advice. Information and assistance can be obtained from official bodies such as Employment New Zealand, or from a Community Law Centre for free advice.

Key Resources