The Government has announced that the Holidays Act 2003 will be repealed and replaced by the Employment Leave Act to streamline leave entitlements and address other key areas. Some of these are outlined below.
Hours Based Accrual Model
Under the proposed system, both annual and sick leave entitlements would begin accruing from the first day of employment, based on hours worked. Instead of a flat entitlement, leave would be earned in proportion to contracted hours. Employees will also have access to family violence and bereavement leave from day one. Workers will be able to take sick leave in hourly increments instead of using a full day’s entitlement. This new model will simplify entitlement calculations and avoid anniversary date complexities.
Returning to Work Post Parental Leave
Leave will fully accrue during parental leave, preventing financial disadvantage. New parents will receive their full annual leave pay upon returning from parental leave.
New Pay Statement Requirements
Employers will be required to provide pay statements containing particular information to help employees more easily comprehend and be across their pay and leave entitlements.
New “Otherwise Working Day” (OWD) Test for Casual Employees
This new test will apply to workers without set days, determining if a public holiday is to be considered a working day if they’ve worked that day of the week for 7 of the last 13 weeks.
New Law Next Year and Transition Period
The Workplace Relations Minister expects the Bill to be passed in the first quarter of next year. Once the Bill becomes law, employers (and payroll providers) will have 24 months to ensure their systems and processes are updated accordingly.
More Information to Come
MBIE will promptly provide information on any of these new law changes to employers, employees, and payroll providers once the Bill is passed. Until the changes are enacted, the current rules remain in effect. Employers must still address any historical underpayments resulting from non-compliance with the current Holidays Act.
Pros and Cons
While the repeal of the contentious Holidays Act will definitely bring about positive changes, there are concerns about the discriminatory impact of reduced sick leave for part-time workers, specifically women with dependants.
How these Changes Compare
If you are curious about how the upcoming changes will compare to the status quo – take a look at MBIE’s factsheet (Key changes employment leave system factsheet).
Get in Touch
For any employment law inquiries contact Blackwood Montagna for expert guidance and support.
