The Court of Appeal today, 22 August 2013, issued our judgment setting aside the High Court Decision regarding what happens to the accrued entitlements upon a Part 6A transfer.
The Judgment is disappointing, however it clarifies that the outgoing employer does not have to remit accrued entitlements such as holiday pay to the new employer. This will considerably change the general industry practise as it has operated for many years in New Zealand and is a disappointing outcome, which hopefully will be corrected in the coming Employment Relations Amendment Act. It means effectively, however, that the customer, the ultimate payer, ends up paying for holiday pay twice as part of the contract price and transfer. There are important commercial and financial consequences if such costs are not factored into the tendering process.