Prime Minister Christopher Luxon is suggesting the Government will soon announce Holidays Act reform that cuts sick leave entitlements for part-time workers.

It follows last year’s proposed changes to the plagued legislation that sought to help businesses the Government says are struggling with the Labour decision to double sick leave for all eligible workers.

Speaking to Newstalk ZB ahead of his trip to China and Europe, Luxon was asked about sick leave entitlements and said an announcement was incoming.

“We might need to do things about pro-rating sick leave as well because people who were on part-time contracts are getting fulltime 10-day equivalency, so Brooke van Velden’s working through some of those issues.”

Luxon said the changes would be announced alongside other related reform by van Velden in her capacity as Workplace Relations Minister.

Pro-rating sick leave would mean part-time workers would be allocated this type of leave based on how many hours or days they worked.

This approach was proposed in an exposure draft of a bill amending the Holidays Act announced by van Velden in June last year.

“Workplaces that rely on part-time workers are particularly vulnerable to unexpected staffing shortages. To explore this issue further, the exposure draft set for consultation will include a proposed approach to pro-rating sick leave, to better reflect how much an employee works,” she said in a June 2024 press release.

The draft also proposed changing how annual leave was provided, moving from an entitlement system to an accrual system.

In December, following consultation, van Velden admitted the draft bill would not solve the issues with the Holidays Act and had told officials to re-think the changes.

“Not only have I heard from submitters that further simplification is possible, but there were some who believed that what we put out for consultation was more complex and had higher compliance costs than the legislation we have now.”

She said it remained her goal to pass amendments into law before the end of the term.