Complexity no reason to cut leave entitlements

TL;DR

Fleur Fitzsimons argues the Employment Leave Bill removes worker entitlements despite aiming to simplify the complex Holidays Act.
The bill replaces leave accrual for casual and additional hours with a 12.5% pay loading, hitting part-time workers hardest.
Complexity justifies fixes, not cuts to sick and annual leave that leave vulnerable employees worse off.

The story at a glance

Fleur Fitzsimons, national secretary of the Public Service Association, criticises Workplace Relations Minister Brooke van Velden's Employment Leave Bill in an opinion piece. The bill seeks to overhaul the Holidays Act 2003, which has caused widespread non-compliance and confusion over leave payments. This is reported now as submissions on the bill closed on 14 April 2026, with the bill having passed its first reading in March.[[1]](https://www.thepost.co.nz/business/360984587/employment-leave-bill-complexity-old-law-no-reason-remove-entitlements)[[2]](https://www.lexology.com/library/detail.aspx?g=15e03f21-986d-4689-a811-a59694bcc43e)

Key points

The Holidays Act is complex, leading to persistent non-compliance where workers miss out on owed leave payments.[[1]](https://www.thepost.co.nz/business/360984587/employment-leave-bill-complexity-old-law-no-reason-remove-entitlements)
The bill pitches itself as simplifying correct payments for leave taken, but in practice reduces entitlements for many.[[1]](https://www.thepost.co.nz/business/360984587/employment-leave-bill-complexity-old-law-no-reason-remove-entitlements)
Casual employees lose rights to accrue sick, bereavement, and annual leave; instead, they get a 12.5% loading on pay (up from 8% holiday pay).[[3]](https://smartly.co.nz/support/blog/employment-leave-act)
Part-time and vulnerable workers face fewer sick leave hours under pro-rated accrual based on standard hours, not flat days.[[1]](https://www.thepost.co.nz/business/360984587/employment-leave-bill-complexity-old-law-no-reason-remove-entitlements)
Annual and sick leave now accrue hourly from day one (e.g., 0.0769 hours annual per standard hour worked), capped for sick at 160 hours.[[4]](https://www.payhero.co.nz/blog/Employment-Leave-Bill-2026)
Fitzsimons says fix the old law's problems without stripping protections, especially as submissions just ended.[[1]](https://www.thepost.co.nz/business/360984587/employment-leave-bill-complexity-old-law-no-reason-remove-entitlements)

Details and context

The Holidays Act 2003 has been criticised for decades for its ambiguity, especially for variable or casual hours, leading to high compliance costs and remediation for employers. Multiple reviews, including a taskforce, recommended reform to make rules clearer without necessarily cutting entitlements.[[5]](https://www.mbie.govt.nz/business-and-employment/employment-and-skills/employment-legislation-reviews/holidays-act-reform-employment-leave-bill)

The bill introduces an hours-based system to cover diverse work patterns, but critics like Fitzsimons and unions argue the 12.5% leave compensation payment for casual/additional hours undervalues time off needs, particularly for sick leave when workers can't work. Part-timers no longer get full 10 days sick after six months but pro-rated hours, potentially less if under 40 hours weekly.[[3]](https://smartly.co.nz/support/blog/employment-leave-act)

This comes amid coalition government pushes for employment law changes; the bill could become law later in 2026, effective 2028 to allow payroll updates.[[6]](https://www.employment.govt.nz/news-and-updates/employment-leave-bill-2026)

Key quotes

"The bill is pitched as making it ‘easy’ to pay workers correctly when they take leave. That sounds harmless enough. It isn't."[[1]](https://www.thepost.co.nz/business/360984587/employment-leave-bill-complexity-old-law-no-reason-remove-entitlements)

— Fleur Fitzsimons, The Post[[1]](https://www.thepost.co.nz/business/360984587/employment-leave-bill-complexity-old-law-no-reason-remove-entitlements)

Why it matters

The bill could reshape leave for millions of NZ workers, balancing employer simplicity against employee protections in a tight labour market. Part-time, casual, and women-dominated sectors like care and retail face real losses in takeable leave time, even if some get higher loadings. Watch select committee report and potential amendments before second reading, as unions push back but government aims for passage this year.