On 19 August 2014 we appeared in the Supreme Court on behalf of LSG Sky Chefs NZ Limited, in an appeal from the Court of Appeal relating to how a transferring employee’s accrued contractual obligations such holiday and sick pay are to be dealt with in a Part 6(A) transfer.
The issue involved one party retaining the accrued entitlements when it should have remitted those funds to the new employer. Those funds were substantial and primarily involved accrued holiday pay entitlements. The appeal was based on the submission that the outgoing employer should not be able to retain entitlements belonging to employees and should remit those accrued entitlements to the new employer for the sole benefit of the transferred employees. This matter was intended to be the subject of specific statutory reform but that legislation has not proceeded. The Judgment will be significant for all employers and employees involved in 6(A) transfers of employment.