Government moves to pass a law to double sick leave from five days a year to 10

The Government will start the process of giving every New Zealander an extra five days of sick leave a year before Parliament adjourns for the summer break.

Prime Minister Jacinda Ardern said the move shows the Government is getting “down to business” when it comes to implementing its pre-election policies.

As well as the new sick leave rules, Ardern has revealed that the Government will today introduce legislation to implement a new 39 per cent top tax rate bill.

That is after she has moved a motion to declare a climate emergency – a motion highly likely to pass in the Labour and Greens dominated House.

The Government has also this morning announced it will extend its debt hibernation scheme for small business.

But the focus of Ardern’s weekly post-Cabinet media conference yesterday was mostly on the new sick leave legislation.

Although the new rules are backed by unions, business groups are not happy.

Retail NZ said the blanket increase to 10 sick days a year is “bad news” for those who work part-time.

And National’s workplace relations spokesman Scott Simpson said more sick leave would “only make our economy crook”.

“Doubling sick leave just piles more costs onto business at a time when they can least afford it, coming on top of minimum wage increases and the proposal for an extra public holiday,” he said.

Workplace Relations Minister Michael Wood, who was with Ardern at yesterday’s announcement, said New Zealand needs to “move past the tough-it-out culture” when it comes to sick leave.

“Covid-19 has shown how important it is to stay at home when people are sick,” he said.

Doubling the amount of sick leave for workers was one of Labour’s pre-election promises.

Wood confirmed that the legislation, which will be introduced before Christmas, would keep the current maximum entitlement of any unused sick leave at 20 days annually.

The announcement means the bill is expected to pass in mid-2021 and will go through the full select committee process so it’s able to receive submissions.

This will not come as welcome news to the Greens, which has previously said it wants to see the bill passed through urgency before the end of the year.

More details on the scheme would be unveiled when it goes before the House.

Wood did say, however, that the Ministry of Business, Innovation and Employment have calculated that it would account for just 0.9 per cent of New Zealand’s total wage bill each year.

Retail NZ chief executive Greg Harford said doubling the amount of sick days for both full and part-time workers will ultimately disadvantage those who want to work part-time.

He said many of those who work part-time often do so because of family commitments or because of study.

For employees who work one day a week, for example, a 10-day sick leave entitlement is equivalent to 20 per cent of a working year.

“This is a significant cost to employers and ultimately will discourage businesses from offering part-time work to those who want it.”

Meanwhile, the Government has also announced it will extend the business debt relief programme for another 10 months.

That scheme meant that Covid-19 hit businesses are able to hibernate their debt for a period of time so they can more easily recover.

Although New Zealand is recovering better than had been expected, Finance Minister Grant Robertson said some businesses need continued support to keep trading.
The scheme has been extended out until October 31, 2021.

“This is intended to give businesses time to explore options for continuing to trade, when they might otherwise have been liquidated by their creditors,” Robertson said.

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