We all know how to pay out public holidays when staff are working or enjoying an extra day off.
It's pretty cut and dried: time and a half and a day in lieu if it's a normal day at work, Public holiday taken (or stat day) if they're away. Piece of cake if you run a predictable, Monday-Friday kind of business.
For some unlucky workers, a public holiday will fall on a rostered day off (RDO). If it's obviously a day that they wouldn't ordinarily work, employers can just treat it as a plain old unpaid day off. Again, no worries...as long as you have a clear, consistent roster.
But in an unconventional industry like hort, hospo or services, you could be dealing with variable work schedules. Swapping shifts, irregular rosters and weather-dependent work can confuse what's an RDO and what's an "otherwise working day".
The Holidays Act itself gives employees "an entitlement to 11 public holidays if the holidays fall on days that would otherwise be working days for the employee". So the mission is to determine what is and isn't an otherwise working day (OWD).
RDO or OWD?
MBIE does have guidelines for these situations, but they're pretty loose. Where it's unclear, employers and employees should try to reach an agreement. To reach that agreement, they should consider:
- what the employment agreement says
- previous or "normal" work patterns
- whether the employee works only when work is available
- rosters or schedules
- whether the employee would have worked, or whether the employer and employee would have reasonably expected the employee would work on that day
You need to take all those things into account, and you can't base your decision on just one.
With all those factors in the mix, it's tough to say exactly what you should do without knowing all the particulars.
So let's go over what you can and can't do.
- You can't adjust the roster to give somebody the public holiday off, just to avoid paying the benefits. If somebody worked the 4 preceding Mondays and then suddenly had Queen's Birthday as an RDO, that doesn't look good. In 2017, the ERA found that Wendy's fast-food chain should've taken into account rostering patterns from the last 3-6 months to determine whether a day was usually on or off.
- To make that more confusing, they added that 3 months really only applied to that particular situation, and shouldn't be used as the yardstick for every case.
- If your roster is completely sporadic or you're in doubt, give it to them as a public holiday taken. You're always better off to be a wee bit generous and play it safe with MBIE. Remember, you can always give more than the minimum, so even if you're just feeling sorry for somebody with a really unlucky work rhythm, you can always pay them a public holiday taken even if it's an obvious RDO. Bear in mind, though, that your employee is never entitled to more than 11 public holidays.
When some public holidays fall on a weekend, they're moved out to the following Monday (or even Tuesday). This is called Mondayisation. When this happens, all the standard public holiday rules apply to the Monday (or Tuesday).
Holidays that can be "Mondayised": the ones that aren't tied to a specific day of the week - ANZAC Day, Waitangi Day, Christmas Day, Boxing Day, New Year’s Day or the day after New Year’s Day. If any of these fall within a weekend, they'll be shifted out.
This is another rule that favours 9-5, Monday-Friday businesses by creating a “long weekend”. And once again, if your people have variable schedules or usually work weekends, it gets a bit tricky. As the MBIE website says, “Mondayisation only happens if the employee doesn’t normally work on the calendar date of the holiday” (ie if they work Monday-Friday).
- If your people always work the weekend, and the public holiday falls on a Saturday or Sunday, that day is treated as the public holiday (even if they also work Mondays). No matter what, you don't have to pay out the holiday twice.
- If you have variable schedules, you're back to the task of figuring out whether the weekend day is one that your people would "usually" work.
- And of course, if neither the weekend day nor the Monday is a normal working day, you're off the hook altogether.
If it seems like Mondayisation is a bit unfair to your employee because their "weekend" is during the week, then you can always agree to transfer the public holiday to another day. As long as you're trying to make things fairer, and not trying to avoid paying public holiday benefits, a transfer is all good.
- Still struggling? MBIE has a pretty impressive quiz-style checklist to help you answer those tricky otherwise-working-day questions.
- If you're using PaySauce, try using our "Timesheet Days Not Worked" report to easily look back on RDO history and establish a work pattern.
- Bit of a boffin? Check out the Wendco ruling, or RDO determination legislation.
Got questions about public holidays, or another tricky staff challenge? Give us a bell or drop us a line!
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