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Time to update your Employment Agreements

Updated: Aug 13, 2021

Recent changes to the Holidays Act 2003 need to now be reflected in your employment agreements with new staff.

Among these changes is the increase in the minimum sick leave for employees from 5 to 10 days after six months’ continuous employment. Employers also need to be aware that bereavement leave has also been extended to cover for miscarriages and still births.

The changes to sick leave automatically apply to all existing staff due to legislation trumping your current individual and/or collective agreement. However, to ensure that new staff employed after 24 July 2021 on an individual employment agreement (IEA) have the correct terms it will pay for you to update your IEA to reflect those changes.

Sick Leave

Your sick leave provision for new employees should now state, as a minimum, that after six months continuous employment they become entitled to ten days of paid sick leave. The maximum entitlement of carried over and current sick leave remains unchanged at 20 days.

If your IEA already provides for 10 or more days of paid sick leave, there is no need to update your IEA.

For existing staff, employed before 24 July 2021 who have an entitlement of less than 10 days paid sick leave, their entitlement will increase to 10 days on their next 12 months anniversary of becoming entitled to sick leave. This means for someone who was employed on 3 May 2021, their entitlement to sick leave does not arise until 3 November 2021. This means that from 3 November 2021 they will be entitled to 10 days paid sick leave. However, if an existing employee was employed on 15 December 2020, their entitlement to sick leave arises on 15 June 2021, which is before the increase to sick leave came into effect. This means that this employee, unless otherwise agreed, will not receive the increase to 10 days paid sick leave until 15 June 2022.

Bereavement Leave

Employers need to be aware that three days’ bereavement leave must be provided to an employee who has suffered a loss due to a miscarriage or still-birth. This leave applies to the employee or if the employee’s spouse or partner's pregnancy ended by way of miscarriage or still-birth.

If your employment agreements state that bereavement leave is provided in accordance the Holidays Act 2003, then there will be no need to amendment your employment agreement. However, if your employment agreement specifies in detail when bereavement leave applies, you will need to amend the agreement.

You can see more about leave entitlements on the Employment website.

Public Holidays Proposal

The Government has made recent announcements that a new public holiday will apply in 2022 to celebrate Matariki. The Government has announced dates for Matariki from 2022 out to 2050, however the legislation to enact this new public holiday is yet to be drafted. That is expected to occur later this year. This means that the number of public holidays also increases from 11 days to 12 days a year from 1 January 2022. Matariki will be a moveable holiday and therefore will fall at different times each year, however, will always be aligned to a weekend.

Details about Matariki are available here.

Variations to Existing Employment Agreements

It will pay to provide a variation letter confirming the increase in sick leave for each of your employees. As each person will have a different date for when their entitlement increases to 10 days paid sick leave, you will need to personalise that variation.

Contact McKone Consultancy if you need assistance in preparing a variation letter for your employees.

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