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Leave Provisions

Cashing up annual leave


To provide for advice on detail on implementing changes.  In New Zealand School Trustees Association (NZSTA) memo 2010/15 and 2011/2 we outlined some changes to the Holidays Act 2003 and Employment Relations Act 2000. The majority of changes for both Acts came into effect on 1 April 2011. This advice will deal with cashing up of annual leave as a result of changes to the Holidays Act.

Holidays Act 

The ability now exists for employees to apply to the employer to cash in up to a maximum of one week of annual holidays minimum entitlement by agreement of their employer. While the employer must consider (providing they do not have a policy not to), they are not required to give a reason if they decline.

Workplace Policy 

Employers may have a workplace policy that they will not consider any requests to cash up annual holidays. This can apply to the whole or only some parts of the business. The policy can only be on whether the employer will consider any requests.  It cannot be about the number of annual holidays an employee can cash up or the number of requests an employee may make.

If an employer does not have a workplace policy on cashing up, they must consider any request to cash up annual holidays in good faith.

How much can be requested?

Employees may request to cash up less than a week at a time. More than one request may be made until a maximum of one week of the employee's annual holidays is paid out in each entitlement year

When does the clock start ticking?

Requests can only be made after a period of 12 months' continuous employment from the anniversary of the employee's starting date - the anniversary date has to fall after 1 April 2011 (so it is not retrospective).

Is Concurrence Required? 

This is likely to vary dependent on the circumstances and what group of employees are involved. The Ministry of Education has provided guidance.  It is also a question of any difference between those who are paid from Operational Funding (BG) and Teachers' Salaries (TS) as this may be a determining factor, as will the contents of their employment agreement in terms of holidays and the periods which they may work during the year e.g. full time, during term breaks.

NZSTA comment

Because of the substantial variations in the impact for board employees and need to ensure there is a consistency of approach to all staff we recommend at this time to adopt a general workplace policy which states that the board "will not consider any requests to cash up annual holidays". It is easier to relax the policy later rather than trying to work through the various issues that might arise. Once we have more experience of what situations arise that will enable some reconsideration of how board policies could be adapted. We can provide further advice at that stage.

Resolution of Board: This should be by way of a board resolution which should state:

"The Board of _____________ will not consider any requests to cash up annual holidays under the provisions of the Holidays Act 2003."

Advise Staff 

If you adopt the policy, then ensure you advise your employees.

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