Recent statements about the relationship between ACC weekly compensation and public holidays revealed a large grey area for employers and considerable confusion for both employees and employers.
The suggestion by the Ministry of Business, Innovation and Employment (MBIE) was that employers must provide paid public holidays to employees who are absent due to injury and who are receiving ACC weekly compensation.
This was at direct odds with previous ACC advice that compensation did in fact cover public holidays. However on their website, ACC even stated that employers may have to pay their employees while they are getting weekly compensation for injuries, adding further confusion.
MBIE had, in my opinion, incorrectly interpreted the Holidays Act 2003 and the ACC legislation, and had failed to appreciate the legislative history of public holidays. The Holidays Act clearly states that employers are not required to pay anything to employees while they are receiving ACC weekly compensation. The MBIE hadn’t got it right and they admitted at the time that more clarity and guidance were needed.
A few weeks later, following my interview with RNZ, the MBIE reversed their advice. They agreed and provided updated guidance on their website to reflect what I consider to be the correct view: that employers need not pay workers for public holidays while the worker is receiving ACC weekly compensation.
The situation is a little more complicated in the first week that a worker is off work due to a work-related injury. The employer is required by the ACC legislation to pay the first week's compensation (80% of normal earnings). MBIE considers that if a public holiday falls during that first week, the employer must pay for the public holiday as a public holiday.
While the Holidays Act is not entirely clear, I consider the indications in the legislation are that this is correct.