Agreements that refer to the 1981 Holidays Act

Three main areas employers, employees and unions needed to consider with transitional arrangements when the Holidays Act 2003 replaced the Holidays Act 1981 on 1 April 2004 were:

• ensuring existing annual holidays entitlements were maintained
• moving from special leave to sick and bereavement leave
• converting days in lieu into alternative holidays

Ensuring existing annual holidays entitlements were maintained

Any annual holidays entitlements that an employee had under the Holidays Act 1981 automatically remained in place when the Holiday Act 2003 came into force on 1 April 2004.

For example, if an employee had two weeks' annual holidays due to them on 1 April 2004 that entitlement remained in place.

Similarly, the date that an employee next became entitled to annual holidays was not affected by the Holidays Act 2003.

Moving from special leave to sick and bereavement leave

Any special leave that an employee was entitled to under the Holidays Act 1981 automatically became sick leave on 1 April 2004. For example, if an employee had three days' special leave left on 1 April 2004 this became three days' sick leave.

The entitlement date remains the same for subsequent entitlements to sick leave. For example, an employee who had an entitlement date of 5 April for special leave and had 5 days of special leave under the Holidays Act 1981 became entitled to have that 5 days turned into sick leave and became entitled to another 5 days sick leave on 5 April (making a total of 10 days sick leave).

Periods of employment before 1 April 2004 counted toward qualifying for bereavement leave. For example, if a full-time employee was employed on 1 February 2004 they would have qualified for bereavement leave on 1 August 2004.

Managing changes to employment agreements: moving from special leave to sick and bereavement leave

The Holidays Act 1981 provided a joint sick leave and bereavement leave entitlement called “special leave”. Many existing employment agreements used the language of that Act to express employees' conditions for leave.

If an employment agreement is framed in this way, even if its provisions in some way exceed the minimum established by the Holidays Act 2003, the employer and employee should consider renegotiating the employment agreement to reflect the provisions and language of the Holidays Act 2003.

Failure to make needed changes may create additional leave entitlements that were not intended.

When you are renegotiating, make sure that any reference to each form of leave in your agreement (such as domestic leave, special leave or family leave) maintains the minimum sick leave entitlement of five days a year and the minimum bereavement leave entitlements while also reflecting any special arrangement between the employer and their employees.

If the existing agreement has sick leave, accumulation or other provisions that are more favourable than the Holidays Act 2003, the relationship between the Act and those provisions should be clearly expressed.

Be sure that any negotiated changes are in writing, as “custom and practice” may not be sufficient if there is a dispute.

Converting “days in lieu” into alternative holidays