This concept is important because it determines whether a person who does not work on a public holiday receives payment for the day, and also whether a person who does work on the public holiday is entitled to an alternative holiday (day in lieu).
To work out an employee's entitlements to holidays and leave, you need to know whether the day is "an otherwise working day" for the employee. You need to apply this to public holiday entitlements, alternative holidays, sick and, bereavement and to transferring public holidays.
What would otherwise be a working day can be loosely translated to mean what would be a normal working day for the employee concerned.
For employees with set days of work this shouldn’t be a problem.
However, for an employee who works variable hours, or for a casual employee who is engaged on an ‘as and when required’ basis, the task is not so simple. For these sorts of employees, figuring out what would be an otherwise working day needs to be assessed on an employee by employee basis.
If it is not clear whether a day would otherwise be a working day for the employee, the Act states that the employee and employer must take into account the following factors with a view to reaching agreement on the matter:
The employee’s employment agreement
The employee’s work patterns
Any other relevant factors such as if the employee works for the employer only when work is available or the employer’s rosters or other similar systems; and
Whether, but for the day being a public holiday, the employee would have worked on the day concerned.
In the more difficult cases (for example where the business has a 24 hours x 7 days per week operation, and the days and hours are not fixed) determining a consistent method of working out what an ‘otherwise working day’ is, is desirable.
Some employers treat the roster as determining whether the day is ‘otherwise a working day’. This means that if the employee is rostered to work - it is an otherwise working day. If the employee is rostered to work, and is sick, or seeks bereavement leave, this is a reasonable basis for working out the ‘otherwise working day’. They would have worked, but are unable to, and therefore get a paid day sick leave/bereavement leave.
BUT if the roster is the only factor used by an employer to determine otherwise working days for public holiday entitlement, the employee will never get a paid (un-worked) public holiday. The employees will only get public holiday entitlements when they are rostered to work, and will therefore received time and a half pay, plus an alternative holiday. Whilst simple, and cheaper for the employer, this does not necessarily accord with the Act, which makes provision for paid public holidays.
Some employers look back over the preceding, say, four weeks and if the employee has worked two or more Mondays in the four week period, they treat Monday as being a ‘working day’ for the purpose of public holiday entitlements. If the employee has worked only one Monday, the day is not treated as a ‘working’ day. Please note this example is not part of the Act, but it can provide a method of agreeing with the employees consistently, whether the day is an otherwise working day.
For reasons of simplicity and convenience, it is easy to see why an employer would prefer a strict mathematical formula that is automated in the payroll system. However, it pays to be aware that an automated rule may not comply with the Holidays Act. A previous Authority ruling stated that there was no ‘one size fits all’ answer and that the emphasis was on a genuine consideration of the factors, rather than a rigidly applied, or automated rule.
The best way is to try and agree a scheme with the staff.
Make the information available and clear to all staff, so they know in advance of the public holiday what their entitlements will be.
If an employer and employee can’t agree on whether a day would otherwise be a working day they can ask a Labour Inspector to make a determination for them. Labour Inspectors can be contacted at the Ministry of Business Innovation and Employment.
Disclaimer This article, and any information contained on our website is necessarily brief and general in nature, and should not be substituted for professional advice. You should always seek professional advice before taking any action in relation to the matters addressed.