Employees unlawfully required to take annual holidays during Lockdown12 September 2022
In E Tū Incorporated v Carter Holt Harvey LVL Limited [ NZEmpC 141; 15/08/22; Holden J] the Court found that CHH unlawfully required employees to take annual holidays during the 2020 lockdown.
This is an important issue, because similar circumstances may arise again in the event of future force majeur events.
On 23 March 2020, CHH informed its employees by email that from 9 to 22 April 2020 they were required to take eight days’ leave from their annual holiday entitlement while self-isolating.
Under the Holidays Act, annual holidays are to be taken by agreement, with the employer not unreasonably withholding consent to the employee’s request to take annual holidays (s18). However, an employer may require an employee to take annual holidays if the employer and the employee are unable to reach agreement (s19), having made genuine endeavours to do so. In those circumstances the employer must give the employee not less than 14 days’ notice of the requirement to take the annual holidays.
The issue in this case was that there was no genuine attempt to reach agreement under s18. CHH simply gave 14 days’ notice under s19. Had there been a genuine attempt to reach agreement the employees may lawfully have been required to take annual holidays.
Other useful points from the judgment are:
Sufficient notice was given
The issuing of the notice on 23 March did provide employees with 14 days’ notice as the first day of annual holidays was specified as being 9 April.
Form of Notice
No particular form is required for notice under s 19(2). The emailed notice told employees they “will need to take” leave, and that leave “can be taken” in a particular order.
Rest and Recreation
While one of the purposes of the Holidays Act is to allow employees to take annual holidays to provide the opportunity for rest and recreation, the Court did not accept that obligates an employer to make a qualitative assessment of whether, in the particular circumstances of an employee, they have been able to fully utilise their annual holidays for rest and recreation.
If it had been entitled to give notice under s 19(2), there would not be any obligation on CHH to revoke that notice once it was in receipt of the Government wage subsidy.
However, whether the obligations of an employer in relation to the receipt of the wage subsidy were met when, at the same time, it was reducing its leave liability in respect of its employees, was not decided.