Bill English

Wellington, Dec 21 NZPA - The Government says changes to allow workers to cash in a week's annual leave and amend how leave is calculated should be no surprise.

Acting Prime Minister Bill English said both measures were long spelt out as National policy.

A review of the Holidays Act has been completed and the ministerial advisory group has reported its recommendations to the Government. However, union and employer representatives on the group were at odds on several issues so their report contains several split recommendations.

In the report findings provided to NZPA the union and employers differed on:

* How to calculate leave and sick leave entitlements;

* trading in holidays for cash;

* transferring public holidays to another day;

* and employers recommended Easter Sunday remain as it is while unions wanted it to become an official public holiday.

They agreed to leave alone the current treatment of public holidays and current entitlements for casual employees.

Mr English said changes would be enacted next year.

"Generally we like what we see and change is coming," he told Newstalk ZB.

"We see a need there to make the calculations a bit more transparent so people know what's actually going on and giving people the opportunity to trade cash for the holidays."

The Government is yet to consider other recommendations.

Labour Minister Kate Wilkinson said her department would consider the recommendations and come back to her with advice by March. Legislation would follow.

"We want a holidays regime that is able to be understood but is fair to both employers and employees," she told Radio New Zealand this morning.

"Nothing is set in stone."

Safeguards would prevent workers being forced to take cash instead of holidays, she said yesterday, for example employers would not be allowed to raise the cash-in at job interviews.

"We are not reducing entitlements. We think the new formula for relevant daily pay will be easier to calculate. We also think it will be fairer to employees and employers and prevent the gaming of relevant daily pay calculations."

Unions and the Labour Party were unimpressed that the Government had already made its mind up on key changes but Business New Zealand chief executive Phil O'Reilly said change was desperately needed.

"Employers have had to labour under incredibly complex legislation for the last two years, put in place by the last government, particularly the concept of relevant daily pay which made the holiday's act the most compliance intensive piece of labour law in the country," he said

"It's quite an outrageous situation when you've got a piece of legislation that applies to every employer being one of the most complex and might I say some workers were regrettably gaming the legislation because of its complexity in order to make sure they got the best out of it."

Labour MP Darien Fenton said the review was a sham with outcomes predetermined.

"I'm not sure why the Government even bothered to ask people to submit on cashing up a fourth week's leave when it was obvious they were going to do it anyway," she said in a statement.

"But even worse, the Government has taken the opportunity to add on a whole set of other changes, which were not signalled by National at the last election."

Council of Trade Unions president Helen Kelly said the result of changes would see workers get less leave.

She said changes to leave calculations were insidious.