[EMPLOYMENTNZ] PUBLIC HOLIDAYS PAID ON TERMINATION
There is a rule that means employees are sometimes entitled to be paid for public holidays that fall after their employment has ended (ie after their termination date). This can happen if the employee has unused annual holidays they are entitled to at the time their employment ends. This rule doesn’t apply to employees who haven’t completed 12 months’ service because they haven’t become entitled to annual holidays yet.
To work out whether an employee is entitled to paid public holidays that happen after their employment has ended, follow these steps:
- Treat any remaining annual holidays that the employee is entitled to as if the employee had taken them immediately after the date their employment ended.
- The employee must be paid for a public holiday if it:
- happens within the time period created by adding on these remaining annual holidays to the end of employment, and
- happens on a day that the employee would have worked if they were still employed, and the day wasn’t a public holiday.
- If the employee is entitled to be paid for a public holiday then:
- the period that the annual holidays covers is extended by one day for each public holiday the employee is entitled to be paid for, and
- this new extended period may contain more public holidays which also need to be considered for payment.
The payment for any public holidays is calculated in the usual way. They are paid at the rate of relevant daily pay or average daily pay (if applicable) for the day.
Note that this situation has no effect on the actual end date of employment.
For example: an employee works 5 days a week, Monday to Friday. At their termination date of 22 December (which in this example falls on a Friday eg 2017) they have 5 days remaining of annual holiday entitlement. If these 5 days are added on to their termination date this takes them to 29 December. Two public holidays fall within this period, (25 and 26 December), so these must be treated and paid as public holidays.
The 2 days’ annual holidays which would have covered the 25 and 26 December are then added on to the end of the period (ending on 29 December). This creates an extended period which ends on 2 January. This extended period includes the public holidays 1 and 2 January. These public holidays are also treated and paid as public holidays.
1 and 2 January are now treated as public holidays, this means two annual holiday days are not being used. These two annual holiday days are then added on to the end of the period ending on 2 January, creating a new extended period ending on 4 January. There are no public holidays falling on 3 or 4 January so this has no further effect.
Cory has worked for his employer for 2 years and works 5 days a week, Monday to Friday. He finishes work 4 days before a public holiday (which falls on a Tuesday), and has 6 days left from his annual holiday entitlement. Cory gets a day’s pay at his RDP or ADP (if applicable) for the public holiday. This is because if his 6 days’ annual holiday entitlement was added on to his termination date, this period would include the public holiday. Tuesday is also a day on which he would otherwise have worked. If Cory only worked Wednesday to Friday, he would not receive any payment for the public holiday.