Annual leave in NZ: what are you entitled to?

In NZ, you’re entitled to a minimum of four weeks of annual leave at the end of each 12 months of completed continuous employment. This is the absolute legal minimum an employer can provide to their staff. However, if you negotiate more annual leave days as part of taking the role, this should be written into your employment agreement, and can’t be changed without your consent.

Importantly, a ‘week’ in this context refers to what a normal working week is for you. I.e. a full-time, permanent employee will normally work five days per week, in this instance, a week is five days. However, if you work 4 days per week, then that is still a week for these purposes.

There are a few other important things to understand about how your annual leave will accrue:

• Many employers will let you take annual leave before 12 months of employment, because your leave accrues as you go. In other words, you don’t have to wait a year before taking a holiday!
• There is no maximum amount you can accrue, this is different to sick leave, which is capped at 20 days.
• Most non-casual employees will be able to check how their leave is accruing by looking at their payslips.
• You can’t take annual leave without notice. In other words, you’ll need to ask your manager and arrange this ahead of time.

There are several types of job contracts in NZ and one type in particular, casual agreements, often operate slightly differently when it comes to annual leave.

It’s common for casual employees to not take annual leave, but rather for their holiday pay to be included with the rest of their wage. This is because some casual employees work irregularly or intermittently, meaning that it’s not necessary or practical for them to take designated periods of annual leave – they can just decline shifts during the periods they don’t want, or can’t, work.

Indefinitely? No. At a specific time? Yes. As we’ve just covered, you’re entitled to take a minimum of 20 days annual leave per year, and an employer can’t legally stop you taking them at all. But, as we’ve also said, you do need to ask your manager about taking annual leave ahead of time.

This means employers can refuse to grant annual leave requests if they have a genuine business reason for doing so. In other words, if you ask to take leave at a time when your manager feels the company can’t spare you, they might say no. However, they can’t unreasonably refuse annual leave requests just because they’re in a bad mood that day.

Can my employer cancel an approved annual leave request?

Once annual leave has been granted, an employer can’t just decide to withdraw it. They need to have a good faith discussion with you, and it's ultimately your decision on what happens next. If you want to go ahead with your planned annual leave, there’s little the employer can do about it.

However, if you have room for flexibility, you might be able to negotiate something as compensation for the inconvenience of having to change your plans.

The short answer is yes, employers can legally force their staff to take annual leave. However, this can’t be done at the drop of a hat – an employer must give staff at least 14 days’ notice if they’re going to do this.

Some businesses also conduct temporary shutdowns, most commonly at Christmas. These are periods where most, if not all, staff are forced to take leave because the business isn’t operating. Again, staff must be given advanced warning if this is going to happen.

From a legal standpoint, yes you can take all your annual leave in one go. However, as always, you will need to ask your manager about doing this. Whether or not they say yes will likely depend on what’s going on in the company at the moment, and if they can do without your skills and experience for an extended period of time.

It may sound surprising, but many employers are open to staff taking long periods of leave (as long as there’s nothing major going on) because businesses aren’t generally keen on staff having lots of leave built up. This is because unused annual leave is a financial liability for companies – if a staff member saves a lot of leave and then resigns, the organisation has to pay them out. And, if this person is also in a high-paid role, this can amount to a significant amount of money that they weren’t necessarily expecting to pay in one go.

Remember, annual leave is something you’re entitled to, and something you’ve earned. Now, while employers can force staff to take annual leave, they can’t simply wipe it out at the beginning of the next 12 month period and make you start from scratch.

This means that, if you haven’t used your annual leave, and your employer doesn’t force you to take it, you can keep building up your annual leave. Legally, there’s no limit to how much you can accrue, but, in practice, your manager will probably ask you to take some if it’s getting very high. Also, from a general wellness and work/life balance perspective, taking a holiday every now and then is a good idea!

If you resign from your job, or even if you’re fired or made redundant, your employer still owes you for the annual leave you accrued while you worked there. If you’re resigning, you might choose to shorten your notice period by taking some of it as annual leave, if your manager agrees.

However, for any annual leave days remaining on your balance sheet, you will be paid out. This includes:

• Any annual leave entitlement that hasn’t been taken,
• And, 8% of your gross earnings since you last became entitled to annual leave (or, if you haven’t worked 12 months yet, since you started working there),
• Less any sum paid to you for leave taken in advance.