Shortfall on holiday pay sparks legal challenge to a two-decade company practice
The Employment Relations Authority (ERA) has ruled that shift allowances paid to Amcor Flexibles (New Zealand) Limited employees must be included when calculating gross earnings for annual holiday pay, in a determination that overturns more than two decades of company practice.
The decision resolved a dispute between Amcor and E tū Incorporated, the union representing affected employees, over the interpretation of section 14 of the Holidays Act 2003 (HA03) and clauses within the parties' collective agreement.
The matter originated in November 2024, when Amcor employee Stewart Latimer noticed while on annual leave that his holiday pay appeared incorrect.
Latimer believed the payment should have accounted for his shift allowance. He raised the concern with Amcor and the E tū delegate in December 2024, prompting a meeting between Amcor representatives and E tū members in February 2025.
At that meeting, Amcor confirmed that shift allowances had never been factored into gross earnings calculations for holiday pay purposes, a practice it said had been in place since 2002.
Amcor argued its approach complied with clause 16.1 of the collective agreement, which requires holiday pay to be calculated in accordance with the HA03, and that shift allowances qualified as non-taxable payments excluded from the statutory definition of gross earnings under section 14.
E tū disputed this, arguing that both the...
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