Letter to Minister re Relevant Daily Pay

14 October 2004

The Hon Paul Swain

Minister of Labour

Parliament Buildings

WELLINGTON

Dear Minister

Re: Submission to the Transport and Industrial Relations Select Committee on the Holidays Amendment Bill.

We wish to express the Association's disappointment that our submissions to the Select Committee have been ignored.

We refer in particular to the problems that retailers are having with the Relevant Daily Pay calculation as it applies to commission payments. The circumstances that allowed "double dipping" when an employee took sick leave on a public holiday were seen as unintended and have been corrected, and yet the same circumstances apply in the case of commission payments but this situation has been left unresolved.

The "Relevant Daily Pay" calculation, when paid at one half time extra for working on a public holiday has the effect of "double dipping" for a significant number of employees in the retail sector. Take the example, (which is common in retail) where an employee is paid on a weekly or fortnightly base rate, and in addition is paid a monthly commission based on sales for that month. When that employee works on a public holiday, and many retail employees do, then that employee is entitled to Relevant Daily Pay (including commission) plus half that rate again. At the end of the month however the employee is paid a commission based on sales, including the sales for the public holiday, which has already been paid at half time extra.

The net result of this approach is that the employee receives two and a half times the commission for the public holiday.

Clearly this is an unintended outcome from the legislation and requires an amendment if equity is to be restored, as it was in the case of sick leave on public holidays.

We urge you to re-examine this situation and correct what is clearly a problem with Relevant Daily Pay under these circumstances. The suggestion in our submission was to remove commission payments from the definition of Relevant Daily Pay.

We attach our subsequent letter to The Hon Mark Gosche in which we suggested an alternative phrasing of clause 50 (1) and (2) of the Bill to correct the problem.

Yours sincerely

John Albertson

Chief Executive