"Materially Worse": Workers and Unions Clash With Government Over Proposed Leave Law Overhaul

Workplace Relations Minister Brooke van Velden defends the new leave bill despite warnings from workers and unions about significant pay reductions for shift employees.

By: AXL Media

Published: Apr 29, 2026, 2:53 AM EDT

Source: RNZ Pacific

A Shift to Accrual-Based Leave The Employment Leave Bill represents a fundamental shift in how New Zealanders earn their time off. Under the proposed legislation, both annual and sick leave would be accumulated based on actual hours worked rather than the current entitlement-based system. While the government argues this simplifies the law and reduces non-compliance, critics argue it unfairly penalizes those with irregular hours. Public Service Association (PSA) members warned the committee that the move would strip away financial security for some of the country's most essential workers.

The Financial Impact on Frontline Workers Testimony from the frontline highlighted the potential for significant pay cuts. Mary Becker, a charge nurse at a youth inpatient facility, told MPs she faces an annual loss of $2700. Because the bill does not factor shift and overtime allowances into leave payments, healthcare workers who often rely on these penal rates would receive substantially less pay while on holiday than they do while working. Becker warned that such a reduction might force staff to skip leave, exacerbating already high levels of burnout in the medical profession.

Ministerial Defense: "A Necessary Balance" Workplace Relations Minister Brooke van Velden defended the bill, stating that her initial attempts to draft a "no-loser" law were rejected by payroll providers as unworkable. She admitted that while some employees would lose out, the new system also places costs on employers in other scenarios. Van Velden emphasized that the bill offers new benefits, such as accruing leave from "day one" of employment and the ability to cash up 25 percent of an annual leave entitlement, which she believes creates a fair middle ground for the economy.

Public Holidays and the "Premium" at Risk The bill also proposes changes to how public holidays are compensated, including the potential scrapping of days off in lieu for some workers. Employment lawyers warned that removing the "premium" attached to working on public holidays could change employer behavior. Without the disincentive of paying time-and-a-half and providing a day in lieu, businesses might be more inclined to staff public holidays for short, fragmented shifts, further eroding the traditional principle of public holidays as time for family and recreation.

Union Resistance and Political Tension The select comm...