Employment Relations Authority – Paid parental leave – Combining employment with self-employment to reach entitlement threshold
At issue was whether the employee could combine hours worked in self-employment with hours worked as an employee to reach the threshold to receive parental leave payments.
The employee was an artistic researcher who spent some time working as an employee, and some time self-employed as a contractor. After going on parental leave, the employee realised she had not been getting parental leave payments. The Department of Inland Revenue (the Department), under delegated authority from the Ministry of Business, Innovation and Employment (the Ministry) informed the employee she did not meet the requirements for leave payments because she did not work a minimum weekly average of 10 hours for at least 26 of the 52 weeks prior to her expected due date. If the employee’s employed and self-employed hours were combined, she would have easily met this threshold, but when the employed and self-employed hours were separated, she did not.
The employee challenged the Department’s decision not to combine her employed and self-employed hours. The Ministry claimed that the Parental Leave and Employment Protection Act 1987 (the Act) did not allow an applicant to combine a period of employment with a period of self-employment to meet the weekly average of ten hours.
The Authority determined the employee could not combine her hours to meet the threshold. This was because combining hours was explicitly prohibited by s 2AD (external link) of the Act (see para 15).
The Authority recognised strong policy reasons to allow parents to combine hours; combining hours would protect parents who precariously move between employed and self-employed, which is increasingly common in modern working environments (see para 19). However, the wording in s 2AD (external link) of the Act was too clear for the Authority to exercise its wide discretion and combine the forms of employment (see para 21).
The Authority concluded its determination by noting two previous cases where it had overruled s 2AD (external link) of the Act and reversed the Department’s decisions not to allow the combining of hours (see para 23). Each of these cases were distinguished because the parent had relied on incorrect advice from the Department (see paras 24, 25). The parents had asked the Department if they could combine hours and had been assured that they could. The employee in this case had not relied on incorrect advice from the Department (see para 26).
The Authority confirmed the Department’s decision (see para 28).