Background
As you may be aware, over the last few years an issue arose regarding New Zealand businesses and the application of the Holidays Act 2003. It came to light when big organisations like the New Zealand Police, large retailers and government departments (including the Ministry of Business, Innovation and Employment itself) identified issues.
It is now known that this is an issue which has impacted most employers in New Zealand and is due to the complexity of the legislation. In response, the Government set up a Tripartite Task Force to review the Holidays Act with a view to simplifying it.
WSP Review
Over the last 24 months, we have been reviewing whether we have been applying the correct interpretation of the Holidays Act 2003, with the support of external independent advisors from KPMG and PWC, as well as the Labour Inspectors from the Ministry of Business, Innovation and Employment (MBIE).
As a result of this review, we have identified that our interpretation of some leave payment calculations has previously been non-compliant with the Act. The general areas of non-compliance identified relate to the following:
- Payment calculation for annual holidays; and
- Payment calculation for bereavement leave, alternative holidays, public holidays and sick leave.
Who has been impacted?
Employees that may be affected are those who were / are employed by WSP New Zealand Limited (prior to 14 October 2019 was Opus International Consultants Limited) between August 2011 and October 2019. We have reviewed all payments processed back to 2011 and we have identified employees who are owed a remediation payment.
The most common reasons for error involve people with variable pay and/or variable hours of work i.e. allowances, regular changes in the number of hours worked etc. Most employees who have a pay that does not change each fortnight are, in the most part, not impacted.
In some situations, employees taking leave may have been paid more than they were entitled to. We will not be seeking any repayment from employees for any leave we have overpaid.
What action have we taken?
When we were made aware of the issue, we voluntarily commenced our own investigation and analysis. We subsequently agreed a plan of action with MBIE (called an Enforceable Undertaking).
We have reviewed all payments processed back to 17 August 2011 and we have identified employees (both current and past) who are owed a remediation payment.
We have worked closely with the Labour Inspector (MBIE), PWC and KPMG and our Payroll provider - Frontier Software Ltd, to ensure our systems and processes moving forward are robust and to ensure we comply with the Holidays Act.
The Labour Inspector has signed off our remediation methodology, process and recalculations.
Through this extensive piece of work, we are confident that the remediation calculations and system/process improvements fully remedies all issues.
Through remediation we are now able to ensure that our people, historically and currently, receive the minimum entitlements when they have taken or take annual holidays or other leave types.
How will I know if I have been impacted?
WSP has conducted a holiday pay remediation audit and has developed a list of employees (both current and past) who have been affected. We will make contact directly with all past employees who we have identified as being impacted.
We will contact past employees using the details held on our HR records via email, letter and by text message.
We will be contacting employees in a phased approach. Our people are defined into two groups:
Group 1: Commencing December 2020
- Current Employees - who have never received a bonus payment. We have issued communications to this group in early December 2020 and remediation payments will be paid before Christmas.
- Past Employees - who have never received a bonus payment. We will be contacting this group via email, letter and by text message in December 2020/January 2021. Past employees will be required to provide us with updated information and remediation payments will be processed once the completed form has been returned to us.
Group 2: Commencing July 2021 (Pending Court of Appeal)
- This group includes employees (current and past) who have, in their time with WSP New Zealand Limited (prior to 14 October 2019 was Opus International Consultants Limited), received a company bonus payment. The treatment of certain bonus payments for holiday pay purposes is currently the subject of a test case before the courts, taken by the Labour Inspector, on behalf of MBIE and another New Zealand based employer. This case is waiting to be heard by the Court of Appeal (the earlier Employment Court decision has been appealed), which will consider the definition of 'discretionary payments' under section 5 of the Holidays Act. The decision may affect whether our historical bonus payments need to be included in calculations for annual holidays. Once a final judgement in the test case is available, we will consider WSP's position in connection with any bonuses paid between 2012-2016 and during 2018 and whether any further steps are required.
- We hope to have more to share with this group by July 2021.
Frequently Asked Questions
Who has been involved in the remediation process?
An internal WSP team has worked closely with PWC, KPMG, Frontier Software Ltd and a Labour Inspector from the Ministry of Business, Innovation and Employment (MBIE). The team have documented all issues, remediation steps and methodology. This has all been reviewed and our re-calculations have been approved by the Labour Inspector assigned to WSP to complete this work.
If my pay was always the same, will I be impacted?
Generally, employees who have worked a standard number of hours and days per week (i.e. no variability in their pay) will not be affected.
The most common reasons for error involve people with variable pay and/or variable hours of work (i.e. allowances, regular changes in the number of hours worked etc). Most employees who had a pay that did not change each fortnight will in the most part be unaffected.
How far back do recalculations go?
We are required to go back six years from the date of a claim or six years from the date we became aware of the Holidays Act issues up to the point of a full system and process compliance. We commenced discussions with MBIE in 2017, therefore, calculations will range from 17 August 2011 to 31 October 2019 or from when an employee commenced employment with WSP whichever is the earliest date.
When will I know if I am impacted?
We will be contacting employees in a phased approach. Our people are defined into two groups:
- Group 1: Employees (current and past) who were employed by WSP New Zealand Limited (prior to 14 October 2019 was Opus International Consultants Limited) between August 2011 and October 2019 who have not received a bonus payment during their employment.
Communication expected: December 2020 – January 2021
- Group 2: Employees (current and past) who were employed by WSP New Zealand Limited (prior to 14 October 2019 was Opus International Consultants Limited) between August 2011 and October 2019 who have received a bonus payment during their employment.
Communication expected: from July 2021
What will I need to do?
Past employees will be contacted by email, letter, and by text message to the contact details we have on our records.
All past employees will need to provide updated information about bank account, tax codes, student loan, superannuation etc by completing the form below and returning it to [email protected]. Once received we will process your remediation payment in the next available pay run.