Payment for other holidays and leave
For public holidays, alternative holidays, sick leave and bereavement leave an employee is entitled to be paid either their relevant daily pay or average daily pay.
‘Relevant daily pay’
Relevant daily pay is used to calculate payment for public holidays, alternative holidays, sick leave and bereavement leave. Relevant daily pay is the amount the employee would otherwise have earned on the day if they had worked, and includes:
- productivity or incentive payments, including commission or piece rates, if those payments would have been received had the employee worked
- overtime payments
- the cash value of board and lodgings provided.
However, it excludes payment of any employer contribution to a superannuation scheme for the benefit of the employee.
An employment agreement may specify a special rate of relevant daily pay for the purpose of calculating payment for a public holiday, an alternative holiday, sick leave, or bereavement leave, as long as the rate is equal to, or greater than, the rate that would otherwise be calculated using the method above.
‘Average daily pay’
The Holidays Amendment Act 2010 introduced a new calculation, ‘average daily pay’ that may be used where it is not possible or practicable to determine relevant daily pay, or if the employee’s daily pay varies within the pay period when the holiday or leave falls. This replaces the four-week averaging calculation that was formerly applied when it was not possible to determine relevant daily pay.
Average daily pay is a daily average of the employee’s gross earnings over the past 52 weeks. That is, the employee’s gross earnings divided by the number of whole or part days the employee either worked or was on paid leave or holiday during that period.
If an employer and employee cannot agree on the amount of the employee’s ordinary weekly pay, relevant daily pay or average daily pay, a Labour Inspector may determine the amount.
Relevant daily pay or average daily pay?
It is advisable for the employer to attempt to calculate an employee’s relevant daily pay in the first instance. An employer has the discretion to use either relevant daily pay or average daily pay if their employee’s pay varies within the pay period in question. This discretion may be better exercised if the employer knows the results of both calculations.
A penal rate is an identifiable additional amount that is payable to compensate the employee for working on a particular day or type of day.
- a Saturday payment
- a Sunday payment
- a public holiday payment.
Allowances, such as wet weather money, are not penal rates, nor are overtime rates or special rates for working a sixth or seventh day in a week.
A penal rate may be specified in an employment agreement.