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The law allows for leave, but it's not always clear-cut

Date: 29/05/2019

A healthy work-life balance is important, and the Holidays Act recognises this. The Act states that employees are entitled to 4 weeks paid annual holidays a year “to provide the opportunity for rest and recreation”. The timing of annual holidays is to be agreed between the employer and employee, but an employer cannot unreasonably refuse a request for leave. But what happens when an employer has approved a leave request, and then for one reason or another wants to revoke their approval?

A recent decision of the Employment Relations Authority has found that an employee was unjustifiably dismissed after her annual leave was approved, but then her employer demanded that she cancel it. From there the relationship soured, resulting in the employee’s dismissal.

Sarah Beaney worked for Raw Sushi Ltd part time from 2013, until she was dismissed in March 2018. Beaney made two leave requests, for a week each, one over the Christmas break and another in February. Both of these requests were approved.

Two days before the Christmas break, Beaney was told that she would have to reduce her period of leave because the business was too busy and could not accommodate her absence. Beaney agreed to do so, on the condition that her leave request in February would remain unchanged, and that she could take another break around Easter. This was agreed and Beaney worked over the Christmas period.

When February came around, Beaney was again told, just prior to taking leave, that work was too busy, and she could not go on holiday. Beaney refused, stating that Raw Sushi had agreed to her leave request, and she had already made arrangements and would be going. Her employer’s response was that she would be required to attend a meeting upon her return, and that she should not plan on taking any leave over Easter.

Upon returning from her time off, Beaney was isolated and ostracised within the workplace, alleging that no one would speak to her or even make eye contact. Beaney was upset by her treatment and approached her mother for support who sought to discuss the issue with Raw Sushi. Her mother was told that the business owners were offended by Beaney’s refusal to give up her leave, because in their culture elders were not to be disagreed with.

Subsequently, Beaney was given a new employment agreement which varied her hours. The last page of the agreement made criticisms of Beaney for involving her mother in matters relating to her employment and asked that her mother not return to the shop. The new agreement also included allegations that Beaney had left the premises without permission when she had become upset.

Shortly after that Beaney was given a letter terminating her employment because of a “loss of trust in the relationship” relating to poor conduct at work. It was also alleged that her behaviour contributed to the recent departure of two other employees.

The case was heard by the Employment Relations Authority, which concluded that Beaney’s dismissal was directly attributable to her decision to take the approved leave. The Authority found that Beaney was entitled to take leave, especially where it had been approved and agreed between the parties, and “to subsequently choose not to relinquish that leave cannot be construed as insulting to the employer.”

The Authority ultimately determined that Beaney had been unjustifiably dismissed and awarded her $12,500 compensation for humiliation, loss of dignity and injury to feelings.

This is not the first time the Authority has dealt with the issue of revoking annual leave. In 2009 the Authority heard a case brought by the Engineering Printing & Manufacturing Union against Zeal, a wholly owned subsidiary airline of Air New Zealand Ltd, regarding Zeal’s “cancelling” of approved leave.

In response to receiving a strike notice, Zeal began advising individual employees that allocated, provisional leave due to be taken one month later, was cancelled.

Zeal was successful in defending the claim, on the basis that the applicable collective agreement provided for leave to be ‘provisionally allocated’, but to then be either confirmed or denied one month before the leave was to be taken. The Authority found that “provisional” meant that allocated leave was tentative, subject to confirmation and therefore was not approved leave.

While in that case the Authority found that Zeal had not unlawfully cancelled approved leave, this was principally based on the wording of the particular collective agreement. The decision strongly suggests that if the leave had been approved, subsequent revocation of that leave would be unlawful.  

Unforeseen circumstances can arise such that employers can subsequently regret having approved leave for employees, and may wish to revisit this. In these cases, it is open to the parties to discuss varying that leave in good faith as Beaney did for the approved leave she had over the Christmas period. However, there is no obligation on an employee to accept any variation and, as highlighted in the Raw Sushi case, an employer cannot then disadvantage or punish an employee for refusing to vary their leave, once accepted.

In this case the employee truly did get the raw prawn, although ultimately at the employer’s expense.