Retailers have welcomed the reform of the country’s Holidays Act, saying it would provide fairer and more workable regulations for both employers and employees.

Workplace Relations and Safety Minister Brooke van Velden announced on Wednesday that a new Employment Leave Act would replace the Holidays Act 2003.

The new act includes the shift to hours-based accrual for annual and sick leave and the ability for leave to be taken in hours rather than days, among others.

According to Retail NZ CEO Carolyn Young, the changes will significantly reduce complexity and compliance costs for retailers, especially SMEs.

“Proportional sick leave for part-time workers and a single, clear method for calculating leave payments are also positive steps that will benefit the retail sector, where flexible and part-time work is common,” she continued.

Retail NZ also supports other changes in the act, including the removal of leave accrual during ACC or unpaid leave, and a clearer method to calculate leave entitlements relating to public holidays.

However, the organisation was concerned about the proposed increase in Leave Compensation Payment for casual employees from 8 per cent to 12.5 per cent, and the move to pay annual leave at the full regular rate immediately after parental leave, citing unnecessary cost increases for businesses.

Retail NZ said it would work with the government to ensure the new legislation delivers a balanced outcome for both employers and employees.