Holidays always a delicate issue

In normal circumstances, arrangements for holidays and holiday pay are agreed between employers and workers or their representatives.

Unwanted disagreements over holidays and holiday pay commonly pop up where entitlements are not clearly set out in writing. Such disagreements may lead to deterioration in employment relations and possible complaints to employment tribunals.

Of course, around the world, holiday entitlements vary greatly. Most Australians are well aware that holidays here are generally far more liberal than in the Land of the Free.

Yet in Spain many employees are entitled to much more than even Australians expect. A "honeymoon leave" of three weeks vacation, fully paid is common in Spain but unheard of in this country.

Also in Spain, when a couple starts a family, the law states that the new parents can share 16 weeks of paid maternity leave. And there are other European countries where workers get even more: Sweden provides 360 days of maternity leave at 80 percent of full salary.

Such generous perks are common throughout Europe, where it is often said that people "work to live" rather than "live to work" as Americans do. Among the benefits most Europeans enjoy: work weeks as short as 35 hours, 40 days of paid vacation and cash bonuses for vacation travel.

In Australia the whole question of holiday entitlements became an issue during 2005 with the new Industrial Relations laws that the Federal Government has introduced.

The Labor Party and the Unions have consistently argued that Australian workers could lose their rights to public holidays, meal breaks and other important workplace conditions.

ACTU Secretary Greg Combet says that, "Under the Government's new workplace laws individual contracts will be able to be used to cut people's take home pay and strip workers of basic conditions like public holidays, meal breaks, overtime, penalty rates and redundancy payments.”

"The truth is that under the Government's workplace laws basic workplace conditions will be up for grabs. Under these laws, individual contracts will be able to remove many benefits without any compensation to employees.”

In contrast, the Government is adamant that these union claims are wrong or exaggerated and that workers will not be worse off.

When he launched the legislation in Parliament, the Federal Minister Kevin Andrews said that the country needs more choice and flexibility for both employers and employees, so that we can work smarter, reward effort and find the right balance between work and family life.

“And at the same time, we need to ensure that a fair and robust safety net of working conditions is protected by law,” the Minister said.

“The new law accommodates the greater demand for choice and flexibility in our workplaces.  It continues a process of evolution, begun over a decade ago, towards a system that trusts Australian men and women to make their own decisions in the workplace, and to do so in a way that best suits them.” 

According to the Minister, “this is economic reform the Australian way – evolutionary and in a manner that advances prosperity and fairness together.”

Writing in the Sydney Morning Herald on 29 August 2005, commentator Ross Gittins, asked the questions, “why should governments prescribe the number of weeks' annual leave, the public holidays or the meal breaks workers must take? Why not permit workers to give up these conditions in return for higher wages?”

In answering his own questions, Gittins wrote that the obvious objection concerns bargaining power. Conventional theory says that, in any transaction between a willing buyer and willing seller, both parties are better off being left alone.

The unspoken assumption, however, is that both sides have roughly equal bargaining power. But where one party has far more power than the other - such as where a boss bargains with an individual employee - the economists' model offers no assurance the weaker party will get a fair deal.