Roofing company ordered to give ex-worker holiday pay after 18 months on ACC
A Christchurch roofing company was ordered to pay a former employee $8325 in holiday pay – most of which he accrued while off on ACC for almost a year and a half.
DCM Roofing – which is based in Wainoni and has been operating for more than 20 years – hired roofer Jeremy Meiklejohn on April 3, 2017. The role was full-time and paid $33 an hour.
Meiklejohn had an accident at the end of September 2017 and was off work on ACC until mid-January 2018.
He went back to work for about three weeks but went off on ACC again on February 14, 2018, and did not return to the job.
Meiklejohn resigned on July 10, 2019, and DCM paid him $2794 in outstanding holiday pay. It was considered no holiday pay was due for the year to April 2, 2019, as Meiklejohn’s average weekly earnings in that period were zero.
However, by the time he resigned, Meiklejohn was entitled under the Holidays Act to eight weeks of paid annual holiday, less one day taken in advance.
The case was reviewed by the Employment Relations Authority (ERA) on May 10, 2022, with both Meiklejohn and DCM founder and director Iain McPhail giving evidence.
ERA member Philip Cheyne was told DCM used Meiklejohn’s average earnings between April 3, 2017, and April 2, 2018, to calculate the payment for his untaken annual holidays.
“The payment was well short of what would have been paid if the holiday had been taken,” the ERA’s decision said.
“The effect was that DCM paid Mr Meiklejohn holiday pay as if he had been employed for less than a year, rather than for more than two years.”
Meiklejohn’s absence from work between September 2017 and January 2018, and after February 14, 2018, did not affect his continuity of service, the ERA concluded.
Meiklejohn should have received $11,119 in holiday pay, the ERA ruled.
As DCM had already paid $2794, the ERA ordered it to pay the remaining $8325.
This article clearly highlights the concept of 'Continuous Employment' whereby an employee accrues all Leave Entitlements when on ACC, Parental Leave, and Extended Unpaid Sick Leave as if they were at work. It catches many employers out. Th above situation needs careful management, especially around ACC and Extended Unpaid Sick Leave.