Public Holiday Pay: time and a half
The Amendment Act ensures that employees who work on public holidays will be paid at least time and a half for the hours worked on a public holiday.
Under the new Section 50, if an employee works (in accordance with his/her employment agreement) on any part of a public holiday, the employer must now pay the employee the greater of:
• The employee’s relevant daily pay less “penal rates”, plus half that amount again; or
• The employee’s relevant daily pay including all existing penal rates (that relate to the time actually worked on the public holiday).
“Penal rates” are anything that is designed to compensate employees because they are working on a particular day (e.g. Saturday, Sunday or a public holiday). “Penal rates” do not include additional payments for working a 6th or 7th day in a week or at particular times (such as over time or night rates or shift allowances).
This means that the minimum of time and a half is not paid on top of any penal rates.
This provision clarifies that employees entitled under their employment agreement to a penal rate of time and a half (or better) when working on a public holiday will not be entitled to an additional time and a half payment under the Act. Where employees are entitled under their employment agreement to a penal rate of less than time and a half for when working on a public holiday, the employer must top up the employee’s payment to time and a half, as required by the Act.
Transitional Period
The amendment Act also extends the transitional period contained in Section 51 of the Act.
The transitional period allows employers who currently provide payment for work on a public holiday as part of the employee’s regular pay, until 1 April 2005, to agree with employees on how to separate out the required time and a half component.
Under the Amendment Act the transitional period is extended for individual employment agreements to 1 April 2007 and for collective employment agreements to 1 April 2007 or when a replacement collective agreement comes into force, whichever is the later.
The extension of time in the Amendment Act is intended to ensure that employers and unions have an adequate opportunity to negotiate changes to comply with the Act by way of collective bargaining.
Sickness / Bereavement Leave on a Public Holiday
Under the Act there has been confusion over the payment of an employee when they are sick or bereaved on a public holiday that would otherwise have been a working day for the employee. The confusion arose because employees who were sick or who were taking bereavement leave on a public holiday believed that they were entitled to be paid the amount that they would have received had they worked on that day, i.e. time and half.
The Amendment Act clarifies the position. If an employee takes sick leave or bereavement leave on a public holiday the day is to be treated as an unworked public holiday rather than as sick leave or bereavement leave. This means that the employee will get a paid day off but the employee will not be entitled to time and a half or an alternative holiday.
Proof of Entitlement to Sick Leave
Under the Act employers could not demand a medical certificate or proof of sickness or injury until an employee had been absent from work for three or more consecutive calendar days. There were concerns raised that this would lead to sick leave abuse. Therefore the Amendment Act provides that employers will be able to request proof of illness or injury (such as a medical certificate) from an employee within the three consecutive calendar days limitation in the Act if:
- the employer has reasonable grounds to suspect that the sick leave being taken by the employee is not genuine;
- the employer informs the employee of the requirement to provide the proof as soon as possible after forming the suspicion;
- the employer agrees to meet the employee’s reasonable expenses in obtaining proof of sickness or injury.
The comments set out in the above commentary are general. Contact us should you have any queries about how these amendments may impact on your business or employment agreements specifically.
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