Holidays Act

What are the issues relating to the Holidays Act and holiday/leave payments?

KiwiRail, along with many other large and medium sized organisations, has faced challenges in correctly calculating leave entitlements for employees under the Holidays Act 2003.

The issues concern what should be counted when calculating payments for bereavement leave, alternative days, public holidays and sick days, along with annual leave.

Over time, these issues have resulted in some staff receiving incorrect payments, with the specific areas that require remediation dating back to 2011.

Who is affected by this issue?

The issue affects some individuals who are, or were previously, employed by KiwiRail from April 2011.

Not all employees who worked during this period are affected, as there will be instances where holiday pay was calculated correctly or at a higher rate.

We finalised the initial payment calculations for the period April 2011 to mid-February 2019, with initial payments made to current employees in July 2020 and former employees in August 2020. Our calculations were confirmed by MBIE as compliant with the Act.

In June 2022 we completed our final upgrades to our payroll systems and processes to ensure alignment with the Act. We have now finalised the payment calculations for the period February 2019 to June 2022. Payments to current employees for this shorter recalculation period are scheduled to be made from March 2023.

Contractors or Temps who invoice KiwiRail directly are not affected by this.

How do I know if I’m affected?

Due to variations in earnings history and leave patterns for our business, every case has been assessed individually; therefore, each payment amount will be different, and there will be cases where no payment is owed.

Once the calculations are finalised and we are ready to make payments, we will contact affected current employees, and advise them of the amount they will get and the date they can expect this to be paid.

We will also contact affected former employees at their last known address to request additional information, such as tax codes, which is required before any payment can be made. Some former employees have already been in touch with us so we already have this information for them

If you are a past employee of KiwiRail and you believe you are eligible, you can register your interest by clicking the link to our online registration form -  https://form.kiwirail.co.nz/Runtime/Runtime/Form/Form.FormerEmployeePaymentDetails/. You will need to be able to upload a copy of your bank account details, photo ID and fill in a tax form. If you have any difficulty in completing the online registration, please email the team at HolidaysAct@kiwirail.co.nz. 

What period will be covered by the payment?

The first phase of remediation calculations covered the period 1 April 2011 through to 16 February 2019.

The second and final phase of remediation calculations covered the period 17 February 2019 through to 11 June 2022.

Why has it taken so long to make these payments?

We appreciate that communication first went out in late 2018, but as mentioned earlier, this is a complex problem which has required KiwiRail to review every employee and has therefore taken some time for us to investigate and recalculate remediation payments for every employee.

With more than 8,000 current and former employees who need to be included as part of this process, we have taken every reasonable step to ensure that the payments are correct for the period they cover, to ensure that all calculations ae accurate and that there is no need for further recalculations.

More information around payments can be found here.

What are the main reasons as to why the Holidays Act payments were not calculated correctly?

Complexities generally arise in two areas of the Holidays Act:

1. Payment calculation rules for annual holidays.
2. The method of calculation for bereavement leave, alternative holidays, public holidays and sick leave.

Problems can arise with the method used to calculate the payment owing to an employee, as there are different ways of calculating what should be paid for a specific day/week of leave or holidays.

Ordinary weekly pay, average weekly earnings, relevant daily pay and average daily pay are the calculations that are used depending on the type of leave that is taken. If the incorrect method of calculation is used it can result in an overpayment or an underpayment to an employee.

Calculations are made difficult as the Act refers to annual holidays being paid in weeks, while other leave types (bereavement leave, alternative holidays, public holidays and sick leave) are paid in days.

Employers will often accrue, calculate and pay holidays and leave taken in hours to allow smaller quantities of time off to be taken by an employee (e.g. half day = 4 hours).

Calculation errors can also happen when employees receive additional allowances, work regular overtime or their hours vary day-to-day or week-to-week.

Who do I contact for further information?

More information around payments can be found here.

If you have any further questions or concerns, please feel free to contact the project team at HolidaysAct@kiwirail.co.nz.