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Payment For Sick Leave If Taken On A Public Holiday

You are not required to pay your staff time and a half if they call in sick on a public holiday they would have otherwise worked.

  • We first look at the criteria for payment of time and a half for working on a Public Holiday.
  • We then look at the way in which payment for sick leave is calculated.
  • We look at the definition of "Relevant Daily Pay".
  • Using the above information, we then examine the various conclusions that can be drawn when paying for sick leave that is taken on a public holiday.

Time And A Half Payment

Payment of time and a half is provided by Section 50. We added the bold and underlines - the legislation itself is plain text.

Section 50
Employer must pay employee time and a half for working on public holiday

(1) If an employee works (in accordance with his or her employment agreement) on any part of a public holiday, the employer must pay the employee at least the portion of the employee's relevant daily pay that relates to the time actually worked on the day plus half that amount again.

(2) This section is subject to section 51 (Transitional provision for employers who already pay for work on public holidays in employee's regular pay).


There are two important points to keep in mind from this section

  • First, note our highlighting of time actually worked on the day.
  • The other point to remember is the calculation method - relevant daily pay ... plus half that amount again. You will understand why shortly.

Payment For Sick Leave

Payment for sick leave is covered by Section 71. The highlighted subsection 1 requires payment of the employee's relevant daily pay.

Section 71
Payment for sick leave and bereavement leave

(1) An employer must pay an employee an amount that is equivalent to the employee's relevant daily pay for each day of sick leave or bereavement leave taken by the employee that would otherwise be a working day for the employee.

(2) Despite subsection (1), an employer is not required to pay an employee for any time for which the employee is paid weekly compensation under the Injury Prevention, Rehabilitation, and Compensation Act 2001 or former Act.

(3) An employer must not require an employee to take as sick leave any time for which the employee is being paid

(a) first week compensation by the employer under section 97 of the Injury Prevention, Rehabilitation, and Compensation Act 2001 or former Act; or

(b) weekly compensation for a work-related injury within the meaning of that Act or former Act.

(4) However, if an employer pays the difference between the employee's first week compensation or weekly compensation and ordinary weekly pay , the employer may agree with the employee that he or she may deduct from the employee's current sick leave entitlement 1 day for every 5 whole days that the employer makes that payment.


Relevant Daily Pay

Relevant Daily Pay is a defined term under the Act, and is used for calculating payment for sick, bereavement, public holidays taken, and alternative holidays taken.

We have highlighted in red the clause that specifically excludes the 50% loading from these calculations.

Section 9
Meaning of relevant daily pay

(1) In this Act, unless the context otherwise requires, relevant daily pay, for the purposes of calculating payment for a public holiday, alternative holiday, sick leave, or bereavement leave,

(a) means the amount of pay that the employee would have received had the employee worked on the day concerned; and

(b) includes

(i) productivity or incentive-based payments (including commission) if those payments would have otherwise been received on the day concerned:

(ii) payments for overtime if those payments would have otherwise been received on the day concerned:

(iii) the cash value of any board or lodgings provided by the employer to the employee.

(2) To avoid doubt, if subsection (1)(a) is to be applied in the case of a

public holiday, the amount of pay does not include any amount that would be added by virtue of section 50.

(3) If it is not possible to determine an employee's relevant daily pay under subsection (1), the pay must be calculated in accordance with the following formula: a div b

where

a

is the employee's gross earnings for

(i) the 4 calendar weeks before the end of the pay period immediately before the calculation is made; or

(ii) if, the employee's normal pay period is longer than 4 weeks, that pay period immediately before the calculation is made

b

is the number of whole or part days during which the employee earned those earnings in the 4 calendar weeks, or longer period (as the case may be) including any day on which the employee was on a paid holiday or paid leave; but excluding any other day on which the employee did not actually work.

(4) However, an employment agreement may specify a special rate of relevant daily pay for the purpose of calculating payment for a public holiday, alternative holiday, sick leave, or bereavement leave if the rate is equal to, or greater than, what would otherwise be calculated under subsection (1) or subsection (3).


Conclusion

The above three sections clearly indicate that time and a half is not paid for sick leave taken on a public holiday. Look at it this way

  • Section 71 requires payment of the employee's relevant daily pay for a days sick leave.
  • Section 50 requires payment of one and a half times the employee's relevant daily pay for time worked on a public holiday.
  • Accordingly the total amount paid for working on a public holiday is not the employee's relevant daily pay - it is the employee's relevant daily pay plus half that amount again, as very clearly stated in Section 50.
  • To become entitled to the 50% loading, an employee must actually work on the day, as also very clearly stated by Section 50. The employee cannot have "actually worked" if they are off sick.
  • Furthermore, Section 9(2) specifically excludes the 50% loading.

More on public holidays

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Other leave sections

Public Holiday Entitlements
Ace Payroll receives many calls immediately after every public holiday, asking whether a particular employee is entitled to be paid for the public holiday more..
Public Holiday Taken
Use this method for an employee who did not work on the public holiday, but would have worked had the day not been a public holiday more..
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