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Chris The Lawyer
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 22977
Experience:  38 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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I am being made redundant and have a redundancy clause in my

Customer Question

I am being made redundant and have a redundancy clause in my contract.
I have 40 days leave owed and this under the holidays act must be payed out in my final pay period
Will annual earnings plus the leave payed out in the final pay be the total annual earnings for redundancy calculation purposes/average weekly income? I would think so....
Regds TC
Submitted: 1 year ago.
Category: New Zealand Law
Expert:  Chris The Lawyer replied 1 year ago.

I am just reading this now

Expert:  Chris The Lawyer replied 1 year ago.

Redundancy is generally calculated on the time you have worked. If you are owed holidays, that is reflected in the total time you have been at the workplace, so it will not add another 40 days entitlement to redundancy. It can depend on how the redundancy is calculated under your contract, but it will be based in most contracts on your time with the employer. That time includes the leave entitlement which accumulates with your service, but the leave entitlement does not extend your service with the company.

Customer: replied 1 year ago.
Please read and understand the question...Will the annual leave paid out in the last pay, be included in the annual earnings for calculation of the average weekly earnings that are the basis of redundancy payment, in my case 52 weeks at average weekly earnings for the twelve months up to severance date.
Expert:  Chris The Lawyer replied 1 year ago.

I did understand what you meant. Annual leave looks forward, in the sense that you accumulate the right to annual leave. So at the point at which you are either made redundant or take the annual leave, the holiday pay is for the 40 days ahead, and is not for the previous period. This means that the holiday pay is not included in your calculation of average weekly earnings. You would otherwise be claiming more than you were actually paid because this would then inflate your 12 month income by an additional 40 days pay.