PLEASE NOTE: This article was published on the date listed below and may now contain information that has since been updated or changed. We have retained this article as it may still contain helpful comments. However, we advise you to make an appointment to see us for the most up to date information on this topic.

March 2004

The Holidays Act 2003

The Holidays Act 2003 comes into force on 1 April 2004 and replaces the Holidays Act 1981. The old Act was outdated and difficult to understand. The new Act seeks to be clearer, more relevant to current industrial practice by providing flexibility and also to provide enhanced entitlements to employees.

The Act introduces a large number of changes, only the most significant are reviewed here. They are:

Public Holidays

  • In some circumstances employees can work on a public holiday, but must receive another paid day off in lieu.
  • In addition, employees who work on a public holiday are to be paid at time and a half.

Special Leave

  • Special leave is now separated into ‘sick leave’ and ‘bereavement leave’.
  • Employees are entitled to 5 days sick leave.
  • Employees are entitled to 3 days bereavement leave.
  • Employers must allow employees to use their annual leave if their sick leave or bereavement leave is exhausted.
  • There are special provisions for employees who are not in continuous employment.
  • Employees can now carry over sick leave to a maximum of 15 days, plus the current year’s entitlement.
  • There are new provisions for calculating the daily rate for sick leave, bereavement leave and statutory holidays.

Annual Leave

  • From 1 April 2007 employees are entitled to 4 weeks annual leave.
  • Employers can pay holiday pay with the employee’s weekly pay (‘pay as you go’) in certain circumstances.
  • There are new provisions relating to the ability to have ‘closedowns’.
  • There are new provisions relating to the calculation of holiday pay.


  • The penalties for failing to comply with some provisions have increased from $500 to $5,000 for an individual and $10,000 for a company or body corporate.

It is important that all employers are aware of their obligations under the Act.