Workplace Relations Minister Directs Major Shift in Holidays Act Reform to Simplify Compliance

Brooke van Velden Responds to Feedback by Pursuing Hours-Based Accrual Model for Annual Leave.

Workplace Relations and Safety Minister Brooke van Velden has announced a significant change in the direction of Holidays Act reform, following feedback that the initial draft Bill proposed by the Government was overly complex and would result in higher compliance costs for both employers and employees.

The Government’s targeted consultation on the exposure draft Bill, which built on work initiated by the previous administration, revealed concerns that the proposed reforms would not effectively address the issues with the existing Holidays Act. According to Minister van Velden, the draft Bill failed to deliver the simplicity and certainty sought by both employers and employees.

“While the consultation revealed a desire for simplification, some submitters expressed that the proposed Bill introduced more complexity than the current law,” said Ms van Velden.

In response, she has directed officials to pivot towards an hours-based accrual model for annual leave, a system that could provide clearer and simpler rules for both workers and businesses. The Minister also tasked her officials with considering alternative models for more complex work arrangements to ensure simplicity without compromising fairness.

Focus on Reducing Complexity and Compliance Costs

“The goal is not just to have ‘workable’ legislation but to create a system that reduces complexity and compliance costs as much as possible,” van Velden stated. She emphasized that the new approach will better meet the needs of businesses and employees by providing clarity on how leave is accrued and managed.

Switching to an hours-based accrual system could offer a streamlined solution, particularly for workers with varied schedules or non-traditional work arrangements. However, the change may require the drafting of a fundamentally different Bill, which the Minister believes will lead to greater long-term benefits.

New Legislation Expected by 2025

Minister van Velden remains committed to passing a new Holidays Act by the end of the current parliamentary term. She has directed officials to begin work immediately on developing this new approach, with Cabinet decisions expected in 2025.

“While this will require careful work and consultation, I am confident that the effort we invest now will result in a better, simpler system for everyone,” van Velden concluded.