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86 posts

Master Geek
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Topic # 245424 3-Feb-2019 07:56
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Looking for some assistance from employment nerds to make sure I'm not making a fool of myself.

 

I was employed on a fixed term contract with an employer for approx. 18 months. During this period of employment there was a notified closedown period over the Christmas/New Years period. On receiving my final pay it was significantly different from what I had calculated using guidance from the Holidays Act and MBIE website. I informed the employer of this fact and they did nothing about it for two months. Now they have come back to me with their calculations and a refusal to accept that they could be wrong. There is a difference of 2.5x between myself and the employer.

 

As I see it here are the facts:

 

1. No entitlement to annual holidays exist until 12 months of continuous employment: http://www.legislation.govt.nz/act/public/2003/0129/45.0/DLM236874.html

 

2. At the commencement of a closedown period an employee who has no entitlement to annual holidays must be paid their annual holiday as of that date. Annual holidays are calculated as (gross pay for the employment period - the value of any leave taken in advance) x 8%: http://www.legislation.govt.nz/act/public/2003/0129/45.0/DLM237103.html

 

3. The commencement of the closedown period resets the 12 month period required before an annual holidays entitlement exists:http://www.legislation.govt.nz/act/public/2003/0129/45.0/DLM237105.html

 

4. At the termination of employment of less than 12 months the employee is entitled to holiday pay calculated as (gross pay for the employment period - the value of any leave taken in advance) x 8%: http://www.legislation.govt.nz/act/public/2003/0129/45.0/DLM236886.html

 

The timeframe between the commencement of the closedown period and termination of employment is less than 12 months due to the 12 months of continuous employment required for an annual holiday entitlement reseting at the commencement of the closedown period.

 

I believe the holiday pay component of my final pay should be:

 

1. Payment of holiday pay at the commencement of the closedown period in 2017. This period is less than 12 months. Clearly this should have been paid at the time.

 

2. Payment of holiday pay for the period beginning at the commencement of the closedown period and finishing on the last day of employment. This period is also less than 12 months.

 

Where I was employed is Unionised and has a collective employment agreement (CEA). I was employed under this agreement and still belong to the Union. I have contacted the Union for direction but the local representative is on leave. The CEA states a specific leave year period. As part of this CEA there is an entitlement to additional leave (not annual). This leave year period is necessary to manage this additional leave entitlement. 

 

The employer provided holiday pay calculations clearly show that holiday pay has been calculated over two periods; the first being from commencement of actual employment until the end of the CEA specified leave year, the second being from the beginning of the next CEA specified leave year until the termination of employment. Both periods are less than 12 months. In both periods the employer has calculated holiday pay as (holiday entitlement accrued period one - leave taken period one) this is carried forward to period two then the same calculation performed (holiday entitlement accrued both periods - leave taken both periods). These final calculations have been performed using (hours of leave accrued x hourly rate).

 

In my view the employer has in no way complied with the Holidays Act. They have some blind belief that the CEA conditions trump legislation. The employer has also used the above method to calculate holiday pay for the additional leave entitlement, and ignored specific direction given in the CEA. In real dollar terms we are talking about a very significant figure.

 

I acknowledge this is a complicated subject but I feel the employer is stark raving mad if they think they've done these calculations correctly. This was my first period of employment where the Holidays Act applied but I have done significant research and while I might not be 100% correct I'm sure the employer is still in the wrong.

 

The employer frequently uses this type of employment situation and I am concerned that other people might have been impacted by the same wonky holiday pay calculations but are unaware.


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1796 posts

Uber Geek
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  Reply # 2172078 3-Feb-2019 08:44
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Without actual figures of what you're getting and what you believe you're entitled to it's going to be hard to determine who is wrong or right.

 

Regardless, I believe the start and end periods are moot as long as you're getting (or got) your 8% either paid out, as paid leave or a combination of the two.  If you didn't get that you have a case.





The universe consists of protons, neutrons, electrons...and morons.


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Uber Geek
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  Reply # 2172080 3-Feb-2019 08:48
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This is the sort of issue that Unions deal with all the time.  You may have to wait until the representative/field officer gets back from leave & is able to help you.  Alternatively make contact with someone else in that Union's office?


 
 
 
 




86 posts

Master Geek
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  Reply # 2172095 3-Feb-2019 09:35
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floydbloke:

 

Without actual figures of what you're getting and what you believe you're entitled to it's going to be hard to determine who is wrong or right.

 

Regardless, I believe the start and end periods are moot as long as you're getting (or got) your 8% either paid out, as paid leave or a combination of the two.  If you didn't get that you have a case.

 

 

I agree that without figures it's a bit difficult to determine either way. Effectively the employer has aggregated holiday pay over the entire period and based on the total hours balance has multiplied this by the hourly rate to get to a final $ total. They have taken entitlement to holiday pay as being at the leave transition detailed in the CEA and appear to have completely ignored the Holidays Act. The period of employment after this has also been calculated the same way whereas I believe the Holidays Act is very clear that it should be 8% of gross, the CEA also says exactly this for any part year of employment (the employer has ignored this too).




86 posts

Master Geek
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  Reply # 2172096 3-Feb-2019 09:36
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amiga500:

 

This is the sort of issue that Unions deal with all the time.  You may have to wait until the representative/field officer gets back from leave & is able to help you.  Alternatively make contact with someone else in that Union's office?

 

 

Absolutely, after all that's exactly what I pay them for. I just want to make sure I don't look like a complete fool if this dispute becomes formal.


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Uber Geek
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  Reply # 2172100 3-Feb-2019 09:42
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What is the total amount you are after? $500 /$5000 / $20000 ? 

 

If it is in the lower amount, I wouldn't bother the stress is not worth it. 

 

Anything above $5000 or so, I'd probably be interested in chasing up. But, everyone will have a different threshold, work out how much the stress is worth to you. Also, you can't use these guys are a reference in future if you do this. 




86 posts

Master Geek
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  Reply # 2172102 3-Feb-2019 09:43
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surfisup1000:

 

What is the total amount you are after? $500 /$5000 / $20000 ? 

 

If it is in the lower amount, I wouldn't bother the stress is not worth it. 

 

Anything above $5000 or so, I'd probably be interested in chasing up. But, everyone will have a different threshold, work out how much the stress is worth to you. Also, you can't use these guys are a reference in future if you do this. 

 

 

Towards the upper end of the figures you mention.




86 posts

Master Geek
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  Reply # 2172103 3-Feb-2019 09:44
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I should also add that I now work for this same employer under slightly different employment conditions. They are, by and large, a good employer and I don't believe that they're trying to avoid their obligations, rather the payroll department is in error and is too stubborn to admit it. Leave provisions are also very generous, well beyond the minimum of four weeks hence we get to a very big holiday/final pay entitlement very quickly.




86 posts

Master Geek
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  Reply # 2172106 3-Feb-2019 09:48
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surfisup1000:

 

What is the total amount you are after? $500 /$5000 / $20000 ? 

 

If it is in the lower amount, I wouldn't bother the stress is not worth it. 

 

Anything above $5000 or so, I'd probably be interested in chasing up. But, everyone will have a different threshold, work out how much the stress is worth to you. Also, you can't use these guys are a reference in future if you do this. 

 

 

My only previous employer is exempt the Employment Relations and Holidays Acts and I still have an unresolved pay issue with them. Unfortunately you can only use their internal complaints process and once it's run its course there is nothing else. It's an appalling abuse of power.

 

Because of this history I am very concerned about getting exactly what I'm entitled to.


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Uber Geek
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  Reply # 2172133 3-Feb-2019 11:09
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TheMantis:

 

amiga500:

 

This is the sort of issue that Unions deal with all the time.  You may have to wait until the representative/field officer gets back from leave & is able to help you.  Alternatively make contact with someone else in that Union's office?

 

 

Absolutely, after all that's exactly what I pay them for. I just want to make sure I don't look like a complete fool if this dispute becomes formal.

 

 

I don't think you'll look like a fool... I bet other people have thought the same thing as you but were too afraid to ask. 

 

People interpret law differently all the time, especially lawyers. The employer thinks they are in the right, you think you are in the right.  Maybe you made a 'newbie' mistake, but so what, you need to be sure you are receiving your full entitlements . 

 

Quite possibly the union rep will  not understand either - but hopefully they can run it by their lawyer.   Try not to get upset with the employer at this stage, there is always the chance you are in the wrong. 

 

 




86 posts

Master Geek
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  Reply # 2172134 3-Feb-2019 11:20
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surfisup1000:

 

TheMantis:

 

amiga500:

 

This is the sort of issue that Unions deal with all the time.  You may have to wait until the representative/field officer gets back from leave & is able to help you.  Alternatively make contact with someone else in that Union's office?

 

 

Absolutely, after all that's exactly what I pay them for. I just want to make sure I don't look like a complete fool if this dispute becomes formal.

 

 

I don't think you'll look like a fool... I bet other people have thought the same thing as you but were too afraid to ask. 

 

People interpret law differently all the time, especially lawyers. The employer thinks they are in the right, you think you are in the right.  Maybe you made a 'newbie' mistake, but so what, you need to be sure you are receiving your full entitlements . 

 

Quite possibly the union rep will  not understand either - but hopefully they can run it by their lawyer.   Try not to get upset with the employer at this stage, there is always the chance you are in the wrong. 

 

 

 

 

I've already been wrong in this dispute. I initially thought I had achieved 12 months continuous employment, as per the Holidays Act, and thus had an entitlement to annual leave. Therefore, my initial query was based on taking the annual leave entitlement over the Christmas break, after termination, and thus including some public holidays for extra pay. Unfortunately for payroll, in their effort to prove me wrong, they drew my attention to the Sections of the Holidays Act regarding how annual closedowns impact things. This alone added another 2/3 to the amount in dispute. 

 

One thing is for sure though, the legislation is far more complicated than it needs to be. I'd like to think I'm a reasonably smart guy and I've looked for advice in all the right places and I still scratch my head over things. My profession involves frequent contact with legislation so I'd hate to think how the average worker is expected to cope.


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Uber Geek
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  Reply # 2172188 3-Feb-2019 13:09
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I certainly agree it's far more complex than it needs to be.

For a start, they give employees information in a way that only HR really requires (eg accrued leave) and even then usually only when you leave the company.

It's always been a simple matter of starting the year with (say) 25 days and keeping a straightforward running total of days remaining that year in my previous enjoyments.

The only time it should matter whether you are in debit or credit is when you leave (as in this case) and I've never understood the curious separation of pay and holiday pay. You have a salary of, say, $100,000 and for 25 days you need not turn up to work in order to carry on being paid as normal.





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Ultimate Geek
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  Reply # 2172193 3-Feb-2019 13:29
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Go talk to the Labour Inspectorate. They should be able to advise you on NZ legislation, that or go and talk to your local Citizen's Advice Bureau if you don't want not engage the regulator first. 


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Uber Geek
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  Reply # 2172215 3-Feb-2019 14:27
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This sort of mater is far too convoluted and complicated for an organisation like the CAB to help, I reckon.

 

You're a union member, which is great to see, and I agree this is your best line of investigation. I don't think you need to delay things due to your local rep (delegate? [who would be a fellow employee] organiser? [union employee]) being away - just find the contact details for the union's contact centre and they'll hopefully put you in touch with someone with expertise in this area.

 

Interestingly, my wife's dealing with a not too dissimilar situation - a fixed-term contract that ceased a year sooner than initially agreed, and some real questions regarding the calculation of AL in her final pay. She's no longer with the employer, who have essentially ignored requests for some pretty basic information (eg, what is the calculation used to determine AL entitlement; which dates is she recorded as taking AL...); and the pay is managed by Novopay, so need I say more?! There's such a lack of transparency, and given how complex things are I would have thought employers providing adequate breakdowns and explanations to employees would actually make things easier for everyone. 


452 posts

Ultimate Geek
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  Reply # 2172317 3-Feb-2019 17:21
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Usually for complex issues like this just phone your union and they'll put you in touch with an expert. I've been an union delegate in the past and if I had someone approach me with your enquiry I'd have directed them to contact the union directly. So probably not worth waiting for your delegate. In future, I would keep in mind that it is worth phoning your union in the first instance as sometimes it's easier to deal with these things earlier rather than later. Doesn't matter if it's a small or big issue—if it's small the staff at their call centre might be able to give some advice 'on the spot' but for bigger issues they can put you in touch with the right people pronto.

 

Hope you sort out your issue soon.


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