Monday, June 14, 2021

Council to repay close to 6,000 staff after multi-million dollar holiday pay bungle

Christchurch City Council will soon begin paying back millions in miscalculated holiday pay to more than 5,000 current and former staff.

The Council’s Head of Financial Management, Diane Brandish said the first payments would be paid to current employees.

“We have reviewed leave entitlements and payments for current and former employees from 1 April 2011 to December 2019,” she said.

“It’s been a technically challenging project, but we now know what mistakes were made, how they were made and who they affected, so we can start putting things right for people who were underpaid.”

EY has been contracted to help with the work. Council has budgeted $8.5 million for this phase of the project, which has reviewed leave entitlements and payments for 6,309 current and former employees employed during the 2011 to 2019 period. This phase of the project will make back payments to 5,779 current and former employees. Council expects to review and pay staff for this phase of the project within budget.

Current employees will receive any money owed to them in a lump sum payment in a normal pay in June.

Back payments to former employees will be managed separately, through an online claims service portal.

“We’ll be contacting former employees who are owed a back payment in July, using the last contact details we have for them,” Ms Brandish says.

“If people don’t hear from us, it will be because we either haven’t been able to contact them or their pay was correct and no back payment is owed – but they will be able to register online to check.”

The former employee claims service will be available online from 19 July 2021.

Ms Brandish says the errors were due to misinterpretations of the Holidays Act 2003, which is a complex piece of legislation. In 2018 the Government launched a review of the Act and has since accepted 22 recommendations from the taskforce set up to carry out the review.

“We regularly review our systems and processes under our continuous improvement programme,” Ms Brandish said.

“In 2016 we reviewed our compliance with the Holidays Act 2003 and in 2017 we identified that, in some situations, we had underpaid leave entitlements and payments for some current and former staff.”

Having discovered this, there was a legal obligation to check entitlements and payments over the previous six years, she said.

Phase two of the project is now under way and includes updating Council systems and processes to enable compliance with the Act and a second remediation calculation to cover the period since January 2020.

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