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Holidays and Leave Entitlements

8.1 Annual Leave

Regardless of whether a holidays clause is included in an employment agreement, at least the minimum provisions of the Holidays Act apply . It is important to ensure that arrangements made reflect or improve on the entitlements in the Act. Employees cannot waive its entitlement.

Short Form Clause on Annual Leave as set out in the Holidays Act

The Employee shall be entitled to paid annual leave of four weeks per year after 12 months continuous employment with the Employer, in accordance with the Holidays Act.

Short Form Clause on Annual Leave which is more favourable than the entitlement in the Holidays Act

The Employee shall be entitled to paid annual leave as set out in this clause. This clause is in substitution for and not in addition to the entitlements in the Holidays Act:
(i) The Employee shall be entitled to [insert number] weeks annual leave per year;
(ii) The Employee's entitlement shall accrue on a pro-rata basis during each month of their employment from the first day of their employment.

Longer Form Clause on Annual Leave reflecting the entitlements in the Holidays Act

The Employee shall be entitled to paid annual leave on the following basis:
(i) After 12 months continuous employment with the Employer the Employee shall be entitled to 4 weeks annual leave for that year, and to 4 weeks for each subsequent period of 12 months continuous employment.
(ii) Annual leave may, with the agreement of the Employer, be taken in advance.
(iii) The Employee shall, if they so elect, be provided with an opportunity to take at least two weeks of their annual leave entitlement in an uninterrupted break.
(iv) The time for taking annual leave may be agreed between the Employer and Employee and the Employer must not unreasonably withhold consent to the timing proposed by the Employee, but failing agreement the Employer may require the Employee to take annual leave, after consultation with the Employee, and having taken into account work requirements and the opportunities for rest and recreation available to the Employee. The Employer shall provide at least 14 days notice to the Employee directing them to take annual leave commencing on a particular date.

Longer Form Clause on Annual Leave which is more favourable than the entitlements in the Holidays Act

The Employee shall be entitled to paid annual leave on the following basis:
(i) The Employee shall be entitled to [insert number] weeks annual leave for each 12 months of service.
(ii) The Employee's entitlement shall accrue on a pro-rata basis during each month of their employment from the first day of their employment.
(iii) Annual leave may, with the agreement of the Employer, be taken in advance.
(iv) The Employee shall, if they so elect, be provided with an opportunity to take at least two weeks of their annual leave entitlement in an uninterrupted break.
(v) The time for taking annual leave may be agreed between the Employer and Employee, but failing agreement the Employer may, after consultation with the Employee, and having taken into account work requirements and the opportunities for rest and recreation available to the Employee, provide at least 14 days notice to the Employee directing them to take annual leave commencing on a particular date.

8.2 Holiday Pay for Genuinely Casual Employees

This clause allows the employer to pay holiday pay with wages on a regular basis. These arrangements can only be used where the work is so intermittent that establishing four weeks leave is not possible (i.e. for a employee who only works to cover the illness of another employee).

Many workers are described as casual, even where a regular pattern of work is established (i.e. a restaurant worker who works to a roster circulated weekly). Such employees must be allowed holidays and be paid at the time of taking them.

If it is established that the employment is not of a type where Pay As You Go holiday pay is allowed under the Act, the employee would become entitled to holiday pay even though a Pay As You Go agreement was reached. Pay As You Go holiday pay must always be paid at least 8% of gross earnings.

"Pay As You Go" Holiday Pay for genuinely casual employees

The Employee is being employed to perform work on a casual as required basis. The Employer shall, instead of paying the Employee during any periods of annual leave, pay the Employee's holiday pay at the same time as their salary payments. The amount of holiday pay is [insert amount] per hour of work, which shall be paid less tax, at the same time as the Employee's salary payments. The Employee's pay slip will identify the Employee's base hourly rate, and the separate holiday pay.

8.3 Holiday Pay for Employees on Genuine Fixed Term Agreements

Fixed term agreements can be established in circumstances where the job is genuinely temporary (i.e. to fill in for an employee on extended leave, to undertake a short term task). Where the term is for less than 12 months, the employer and employee can agree that holiday pay be paid on a Pay As You Go basis, or can handle holidays as if it were a permanent position.

Care should be taken when deciding to use Pay As You Go provisions as if the term of employment extends beyond 12 months the employee becomes entitled to paid holidays, regardless of Pay As You Go payments having been made.

A series of shorter fixed term agreements that result in the employee working for the same employer for more than 12 months can utilise Pay As You Go provisions, providing each period of work is for a genuine fixed term under 12 months.

Holiday Pay for Employees who are on genuine fixed term agreements of less than 12 months duration - where the Employee is to be provided with paid annual leave

The Employee shall, during their fixed term agreement be provided with [insert number] days paid annual leave to be taken at a time agreed to by the parties, or if agreement cannot be reached, as directed by the Employer having been given at least 14 days notice.

Holiday Pay for Employees who are on genuine fixed term agreements of less than 12 months duration - where the holiday pay is paid on an "Pay As You Go" basis

The parties agree that the Employer shall, instead of paying the Employee during any periods of annual leave, pay the Employee's holiday pay at the same time that the Employee is paid their salary payments. The amount of holiday pay is [insert amount] per hour of work, which shall be paid less tax, at the same time as the Employee's salary payments. The Employee's pay slip will identify the Employee's base hourly rate, and the separate holiday pay.

8.4 Public Holidays

Pay for work on a public holiday
All employment agreements must provide for the employee to receive at least time and a half for any work they are required to undertake on a public holiday. You must select one of the options in the payment clause below (or develop a clause of your own which complies with section 50 of the Holidays Act 2003).

The other public holiday provisions of the Holidays Act do not need to be included in the employment agreement, but the employee maintains an entitlement to them that cannot be waived.

When public holidays are celebrated
In the event of the Public Holidays other than the Days set out in the Holidays Act clauses: These provisions can be used where the employer and employee agree to different dates on which to celebrate public holidays. It cannot be used in a way that would reduce the leave that the employee would have received had the traditional holidays been celebrated.

Payment for work on a Public Holiday

The employee shall be entitled to be paid for the time actually worked on a Public Holiday:

at the rate of time and a half of their relevant daily pay (select this option if no penal rate entered in 7.10), or;
in accordance with section 50 of the Holidays Act 2003.(select this option if penal rate entered in 7.10)

Public Holidays as set out in the Holidays Act, with the ability to require the Employee to work on a public holiday

The employee shall be entitled to 11 public holidays per year, in addition to annual leave. These days shall be those specified in the Holidays Act. Where the day in question would otherwise be a working day for the Employee, the Employee shall be entitled to be paid for that holiday.

The Employer shall be entitled to require the Employee to work on a public holiday.

Where such a day is worked, employees shall be paid for the time actually worked on a Public Holiday at the rate of time and a half of their relevant daily pay, and shall also receive an alternative paid holiday of one day at a later date, the timing of which is to be determined by agreement between the Employer and the Employee, or in the absence of agreement according to the Holidays Act.

Public Holidays as set out in the Holidays Act, and where the Employer does not have the ability to require the employee to work on a public holiday

The Employee shall be entitled to 11 public holidays per year, in addition to annual leave. These days shall be those specified in the Holidays Act. Where the day in question would otherwise be a working day for the Employee, the Employee shall be entitled to pay on that holiday.

The Employer may ask the Employee to work on a public holiday, but the Employee may at their discretion decline to work on that day. Where such a day is worked, the Employee shall be paid for the time actually worked on a Public Holiday at the rate of time and a half of their relevant daily pay and shall, where the day worked would otherwise have been a working day, also receive an alternative paid holiday of one day at a later date, the timing of which is to be determined by agreement between the Employer and the Employee, or in the absence of agreement according to the Holidays Act.

Public Holidays for Piece Work Employees

Where the work or delivery schedule established under this agreement requires piece work to be undertaken on a public holiday, payment for piece work on that day shall be made at a rate that is 50% higher than the rate established under the payment clause above.

8.5 On-call on Public Holiday on Normal Working Day

On Call on Public Holiday that would otherwise have been a working day for the Employee

The Employer may require that the Employee be on call on a public holiday that would otherwise have been a working day for the Employee. Where this occurs, the entitlement to payment is as follows:

(i) If the employee is called out, the employee is entitled to payment (as detailed in the 'Payment for work on a public holiday' clause of this agreement) plus a full day's paid alternative holiday.
(ii) If the Employee is required to restrict activities on the day to the extent that they have not enjoyed a full holiday, but is not called out, then the Employee is entitled to a full day's paid alternative holiday. Payment for the time on call is at [insert agreed rate].
(iii) If the Employee is on call, but is not required to restrict activities, for example if the employee can choose not to accept the call out, then the entitlement to payment and an alternative paid holiday only arises if the Employee accepts the callout and the day would otherwise have been a working day for the employee. If this occurs, then the employee is entitled to payment (as detailed in the 'Payment for work on a public holiday' clause of this agreement) plus a full day's paid alternative holiday. Payment to recognise the time on call regardless of a call out is at [insert agreed rate].

8.6 On-call on Public Holiday not on Normal Working Day

On-call on Public Holiday not on a normal working day

The Employer may request that the Employee is on call on a public holiday that would not otherwise have been a working day for the Employee. Where this occurs, the entitlement to payment is as follows:

(i) If the employee is called out, the employee is entitled to payment (as detailed in the 'Payment for work on a public holiday' clause of this agreement) but not a day's paid alternative holiday.
(ii) If the Employee is required to restrict activities on the day to the extent that they have not enjoyed a full holiday, but is not called out, then the Employee is entitled to a full day's paid alternative holiday. Payment for the time on call is at [insert agreed rate].
(iii) If the Employee is on call, but is not required to restrict activities, for example if the employee can choose not to accept the call out, then entitlement to payment only arises if the Employee accepts the callout. Payment for the time on call regardless of a call out is at [insert agreed rate].

8.7 Sick Leave

Employees who have 6 months service with the same employer are entitled to minimum sick leave provisions under the Holidays Act, regardless of whether or not one of the following clauses is included in the employment agreement.

If the employee is not in continuous employment, special tests regarding eligibility apply. For more information, read "The Effect of Various Work Patterns" on our sick leave fact sheet.

Sick Leave as set out in the Holidays Act

The Employee shall, after 6 months employment with the Employer, be entitled to 5 days sick leave for each subsequent 12 month period of service. Sick leave can be taken where the Employee is sick or where the Employee's spouse or a person who is dependent on the Employee is sick or injured.

Sick leave entitlements can be accumulated from year to year up to a maximum entitlement of 20 days.

Sick Leave which is more favourable than the Holidays Act

The Employee shall be entitled to sick leave as set out in this clause. This clause is in substitution for and not in addition to the entitlements set out in the Holidays Act:

(i) The Employee shall be entitled to [insert days - minimum 5] days sick leave rather than the 5 days referred to in section 65 of the Holidays Act.
(ii) The Employee's entitlement to sick leave shall commence from the first day of their employment.
(iii) The Employee may accumulate up to [insert days - minimum 20] days sick leave from year to year.

Sick Leave for genuinely casual employees

The Employee shall be entitled to five days' sick leave if they have worked for six months at an average of at least 10 hours per week, and at least one hour per week or 40 hours per month. The Employee shall be entitled to an additional five days' sick leave for each 12 month period after this date as long as the criteria above continue to apply. Sick leave can be taken where the Employee is sick, or where the Employee's spouse or a person who is dependent on the Employee is sick or injured.

The assessment of whether the Employee qualifies for sick leave will be made after the Employee has been employed with the Employer for six months (and each subsequent 12 month period) despite the number and length of agreements that have covered these periods of employment.

Unlimited Wellness Entitlement

The Employer operates a Wellness policy which entitles the Employee to unlimited paid sick leave and bereavement leave, in accordance with this clause:

(i) Any sick leave or bereavement leave taken by the Employee must be genuine, and must be communicated to the Employer as soon as is reasonably practicable.
(ii) Any leave taken over and above the minimum leave entitlements in the Holidays Act is taken at the discretion of the Employer, and may be declined by the Employer if in the reasonable opinion of the Employer grounds exist for declining the leave.
(iii) The Employer may at its sole discretion review the Wellness policy and modify that policy following consultation, provided that no such modification will result in an entitlement which is less than that set out in the Holidays Act.

8.8 When Medical Certificate Required

The Holidays Act gives employers the right to require proof of illness:

after three consecutive calendar days' absence
within three consecutive days if the employer has reasonable grounds to suspect the leave is not genuine.

These requirements are subject to various conditions (set out in the Holidays Act) and apply regardless of whether or not the employment agreement contains these requirements.

Medical Certificate Required for Sick Leave

Where the Employee has taken sick leave and has been absent from work for at least three consecutive calendar days, the Employer shall be entitled to require the employee to provide proof of entitlement to sick leave, at the employee's cost.

Where the Employee takes sick leave, and the Employer has reasonable cause to suspect that the leave is not genuine, the Employer shall be entitled to require the employee to provide proof of entitlement to sick leave within the three consecutive calendar days, at the employer's cost. The employer will inform the employee as early as possible that such proof will be required.

8.9 Bereavement Leave

Employees who have 6 months service with the same employer are entitled to minimum bereavement leave entitlements, regardless of whether or not one the following clauses is included in the employment agreement.

If the employee is not in continuous employment special tests for eligibility apply. For more information, read "The Effect of Various Work Patterns" on our bereavement leave fact sheet.

Bereavement Leave as set out in the Holidays Act

The Employee is entitled after 6 months employment to paid bereavement leave of up to three days in relation to the death of their parent, grandparent, sibling, child, grandchild, spouse, or parent of their spouse.

The Employee is entitled to one days paid bereavement leave if the Employer considers the Employee has suffered a bereavement through the death of another person.

Bereavement Leave that is more favourable than the Holidays Act

The Employee is entitled to paid leave of [insert days - minimum 3] days in relation to the death of any person where the death causes the employee to suffer a bereavement.

Bereavement Leave for genuinely casual employees

The Employee shall be entitled to bereavement leave of up to three days in relation to the death of their spouse, child, grandchild, parent, grandparent, sibling or parent of their spouse, if they have worked for six months at an average of at least 10 hours per week, and at least one hour per week or 40 hours per month.

The Employee is entitled to one day of paid bereavement leave if the Employer considers the employee has suffered a bereavement through the death of another person.

The Employee shall be entitled to maintain their bereavement leave entitlement for each 12 month period after this date as long as the criteria above continue to apply.

The assessment of whether the Employee qualifies for bereavement leave will be made after the Employee has been employed with the Employer for six months (and each subsequent 12 month period) despite the number and length of agreements that have covered this period of employment.

8.10 Parental Leave

Employees are entitled to minimum parental leave provisions as stated in the Parental Leave and Employment Protection Act, regardless of whether or not one the following clauses is included in the employment agreement.

Parental Leave

The Employee shall be entitled to parental leave in accordance with the Parental Leave and Employment Protection Act 1987.

Additional Entitlements to Parental Leave

The Employee shall be entitled to parental leave and payment for parental leave as detailed below: [insert specific provisions]

8.11 Unpaid Leave

The following clause is voluntary.

Unpaid Leave

Applications for unpaid leave will be given reasonable consideration by the Employer, but shall be granted only at the Employer's sole discretion having regard to the requirements of the Employer's business and operations. Applications for unpaid leave will be considered in situations such as for compassionate reasons; to undertake a course of work-related study; or to gain additional work-related experience.

8.12 Annual Closedown

The Holidays Act allows the employer to implement one annual closedown a year, and require the employee to take leave if they have no leave entitlement. This clause reflects that provision. If the employer seeks further closedowns during the year they should agree the arrangements for this with the employee.

Annual Closedown

The Employer may closedown all or part of its operations regularly once a year and require the Employee to take leave during the period of the close down, even where this requires the Employee to take leave for which they are not fully reimbursed. The Employer shall provide the Employee with at least 14 days advance notice of the closedown.

8.13 Jury Duty

The following clause is voluntary, and may not apply to your place of work.

Jury Duty

Where the Employee is called for jury duty, the Employer shall continue the Employee's full pay for the duration of the jury service for days that would otherwise have been working days, and the Employee will pay to the Employer any jurors fees received by them.

8.14 Volunteers Employment Protection

The following clause applies, regardless of whether or not it appears in the agreement.

Volunteers Employment Protection

Leave for training or service in the Territorial and Reserve Forces shall be covered by the Volunteers Employment Protection Act 1973.

Employment agreement guide