The holiday sell-out

Daphna Whitmore
The Spark May 2009

 Compared to most western countries, New Zealand workers have pretty meagre holidays. An international survey published April 2009 ( found that New Zealand workers have fewer holidays than many other Western countries. The gap is likely to widen with a new law proposed by the government. The Nats want workers to be able to cash up their fourth week’s holiday each year. Currently, holidays must be taken as time off work and cannot be swapped for money.  According to the Minister of Labour, Kate Wilkinson, “surveys show most workers only take three weeks’ leave each year, so if they want to trade in that fourth week and their employer agrees then it’s a win-win.”

Yeah right.

It’s hard to see the winning side of being cash-strapped and selling a week’s holiday. What’s so great about being too poor to be able to go on holiday, and opting for the pay instead?

On the other hand, for the employers there are a number of pluses. Cashing up a week’s annual leave (even if it is at double pay - as is being suggested as a possibility) still advantages the employer. For instance, a factory worker on a production line produces goods well in excess of his or her wages in the course of a week. This surplus produced is the source of capitalist profit. Put another way, the capital outlaid on wages is far smaller than the sum of capital created by workers of in the production process. If that is not the case the business goes bust.

Business New Zealand chief executive Phil O’Reilly said as much when he pointed out that “being able to swap [holidays for cash] meant employers could still get the productivity even though they paid out the extra week’s wages - effectively a 2 per cent rise on the employee’s annual salary”. NZ Herald 22 March 2009.

Selling annual leave not only advantages the employer in the productivity stakes, it is a backwards step for the working class as a whole, which has had to battle for paid annual leave over many decades.

Sixty-five years ago there was no legislated minimum annual leave. The Annual Holidays Act of 1944 brought in two weeks leave for all workers.  It took decades to increase annual leave from two weeks to three in 1974. It took another 33 years for it to rise to four weeks.

Selling holidays is not something to be held up as a win-win, but as a sorry symptom of a low wage economy.

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