The Government is undertaking a review of the Holidays Act 2003 (the Act) with the aims of:
- making the Act easier for businesses and employees to understand and apply
- reducing direct and compliance costs, and
- making the Act more readily applicable to a range of employment patterns.
At the same time the following are not within the scope of the review:
- options that decrease the current core holidays and leave entitlements, and
- a return to the ordinary pay calculation under the Holidays Act 1981.
This review forms part of the Government’s overall Regulatory Reform Agenda for 2009 and 2010.
Two areas for review (the calculation of relevant daily pay (RDP) and allowing employers and employees to agree to trade the employee’s fourth week of annual holidays for cash) were identified in the Government’s pre-election commitments.