A Victory for Employee Entitlements

We love to remind everyone about their rights on leave and pay entitlements whenever we smell a holiday on the horizon. With Christmas and New Years fast approaching we’re doing it again. In a significant ruling that underscores the importance of fair holiday pay under New Zealand's employment laws, the former owners of Wendy's NZ have lost their appeal against breaches of the Holidays Act 2003. The Employment Relations Authority (ERA) dismissed arguments from Lendco, the company previously operating the fast-food chain, affirming that their practices systematically denied workers their statutory rights to public holiday payments and alternative holidays. This decision, handed down in late 2025, highlights ongoing challenges in the hospitality sector and serves as a timely reminder for employers to prioritise compliance amid a flexible, rostered workforce.

The case originated from a complaint lodged by Unite Union in June 2023, representing 33 union members who raised concerns over unpaid entitlements dating back six years. Lendco, led by the Lendich family including founders Danny and Dianne Lendich and former CEO Danielle Lendich, faced scrutiny from the Labour Inspectorate for multiple failures under the Holidays Act. These included not paying employees for public holidays that fell on days they would otherwise have worked, incorrectly calculating time-and-a-half rates for shifts worked on those days, and neglecting to provide alternative holidays when staff were required to work through public holidays. Additionally, annual holiday pay calculations were found to be inaccurate, further eroding workers' financial security.

At the heart of the dispute was Lendco's rostering system, which required employees to "volunteer" for public holiday shifts to qualify for payments—a mechanism the ERA deemed illogical and exclusionary. ERA member Jeremy Lynch rejected this approach outright, stating it effectively barred workers from their entitlements. Lendco also contended that days like Christmas, when restaurants were closed, could not be considered "otherwise working days," but the authority ruled that such interpretations undermined the spirit of the law, excluding employees from protections they are statutorily owed. The ruling directed Lendco and the Labour Inspectorate to go to mediation to address unresolved aspects of the improvement notice issued earlier.

Danielle Lendich expressed disappointment, arguing the decision could impose undue financial burdens on businesses with variable rosters, potentially requiring costly re-remediation for past practices. She highlighted the hospitality industry's reliance on seven-day operations and questioned whether evolving legal interpretations align with parliamentary intent. However, Labour Inspectorate head Jeanie Borsboom emphasised that employers cannot design systems to evade obligations, even after previous compliance efforts—like Lendco's 2017 remediation of earlier notices. This case follows the sale of Wendy's NZ to the American-based Flynn Group in May 2024, shifting operational oversight but leaving historical liabilities intact.

The implications of this ruling extend far beyond one franchise. In industries like hospitality, retail, and tourism—where shift work is the norm—it reinforces that any day in a worker's potential roster can qualify as an "otherwise working day," potentially entitling them to paid time off or enhanced rates for public holidays. For employers, non-compliance risks not only improvement notices and financial penalties but also reputational harm and union-driven scrutiny. For workers, it validates the power of collective action; Unite Union's persistence turned individual grievances into systemic change, paving the way for backdated payments and stronger safeguards.

This development comes at a pivotal time, as discussions around Holidays Act reforms continue, aiming to simplify calculations and shift entitlements to hourly accruals for greater fairness. Yet, the core message remains clear: Aotearoa's labour laws are designed to protect vulnerable workers from exploitative practices, ensuring holiday pay contributes to rest, recovery, and financial stability. As the ERA's decision demonstrates, courts are unwilling to tolerate loopholes that prioritise profits over people.

Understanding your entitlements is the first step toward advocating for fair treatment at work. Below is a concise list of core rights for employees in Aotearoa New Zealand, drawn from the Holidays Act 2003. These apply to most workers, with some variations for casuals, shift workers, or those in specific industries—always check your employment agreement for additional provisions.

1. Annual Holidays (Annual Leave): After 12 months of continuous employment, you are entitled to at least 4 weeks of paid annual holidays. This accrues pro-rata if you leave before the full year. You can take leave in advance with employer agreement, and it must be paid at your ordinary weekly pay rate (or average if variable). Unused leave carries over but cannot be cashed out beyond 1 week per year unless ending employment.

2. Annual Holiday Pay Calculation: Holiday pay is based on your gross earnings over the previous 12 months (or since last entitlement), at 8% of those earnings. For example, if your gross earnings were $52,000, you'd receive $4,160 for 4 weeks' pay. This excludes overtime but includes bonuses and commissions.

3. Public Holidays: You get a paid day off (at your relevant daily pay) if the public holiday falls on a day you would otherwise work. There are 11 core public holidays (e.g., Waitangi Day, ANZAC Day, Christmas), plus regional anniversary days. If it falls during annual leave, it doesn't count against your leave balance.

4. Working on Public Holidays: If you work, you're entitled to time-and-a-half pay for hours worked, plus an alternative holiday (a paid day off at another time). For shift workers, if the holiday overlaps your roster, you get the greater of time-and-a-half or your average daily pay, and an alternative holiday for the covered portion.

5. On-Call on Public Holidays: If you're on call and not required to work, you're still entitled to payment if the restriction meaningfully limits your holiday. If called in, you get time-and-a-half plus an alternative holiday.

6. Alternative Holidays: For each public holiday worked (or substantially restricted by on-call), you must receive a mutually agreed alternative day off, paid at your relevant daily rate. It can be carried over but must be taken within 12 months or paid out on employment end.

7. Payment Timing and Records: Holiday pay must be paid no later than your regular payday or on the last day of employment. Employers must maintain accurate holiday and leave records for at least 7 years, showing entitlements, usage, and payments.

8. Special Cases: During parental, sick, or bereavement leave, public holidays falling within don't reduce your leave balance. For business closures, you still accrue entitlements. Reforms effective from 2026 may introduce hourly accruals and clearer "otherwise working day" tests for added precision.

   
   

The Coromandel Workers Council (CWC) is a not-for-profit charity dedicated to championing workers' rights and promoting fair workplaces across the Coromandel Peninsula. Since 2020, we've offered free confidential consultations, advocacy, mediation, and support for issues like unfair treatment, wage disputes, and employment agreements—guiding both workers and businesses toward equitable solutions. Our accessible services ensure everyone in our region can thrive. Get in touch at info@cwc.org.nz