Employment Leave Act: Industry Concerns Remain
Over the past few weeks, I have spent considerable time discussing the new Employment Leave Act with growers around the country. I recently attended a grower meeting in Alexandra where the legislation and its implications for seasonal horticulture generated considerable discussion. Those concerns were reinforced again this week at a Hawke's Bay Labour Governance Group meeting, where growers shared their views on what the changes could mean for labour-intensive businesses such as ours. The discussion was not limited to casual labour. Many growers were surprised to learn that the new Leave Compensation Payment (LCP) provisions will also apply to additional hours worked by fixed-term seasonal staff.
Summerfruit NZ supports fair and practical employment arrangements, and we recognise the importance of employers looking after their people. We have no issue with sick leave accruing from day one of employment and acknowledge that employees should be able to access leave entitlements when they are genuinely unwell.
However, we remain disappointed with some aspects of the final legislation, particularly given the effort we invested in the consultation process. Summerfruit NZ worked closely with HortNZ throughout the submission process, providing feedback on behalf of growers and highlighting the unique challenges faced by seasonal horticultural employers. I also appeared before the Select Committee to reinforce the concerns being raised by our industry and to outline the practical implications these changes would have for growers.
While we appreciated the opportunity to contribute, we are disappointed that many of the issues raised by industry were not addressed in the final legislation. In particular, concerns around the Leave Compensation Payment remain unresolved.
Under the new Act, the current 8% holiday pay-as-you-go system will be replaced by a 12.5% Leave Compensation Payment for casual workers and for additional hours worked by employees. The additional 4.5% is intended to cover sick leave entitlements.
The concern for growers is that this additional payment bears no direct relationship to whether an employee actually takes sick leave. Employers will be required to pay the additional 4.5% regardless of leave usage. At a time when growers are already facing increasing labour costs, compliance costs, energy prices and other on-farm inflationary pressures, this feels like a blunt instrument that places yet another cost burden on businesses that are working hard to remain profitable.
Importantly, this is not just an issue for casual workers. Fixed-term seasonal employees who work additional hours above their standard hours will also attract the Leave Compensation Payment on those hours. For many summerfruit businesses, where labour requirements fluctuate significantly throughout harvest, the cumulative cost impact could be substantial.
The legislation will not come into effect until August 2028, providing some time for industry to prepare. Summerfruit NZ will continue working closely with HortNZ and other industry partners to understand the practical implications and help growers navigate the changes. At the same time, we will continue advocating in Wellington for amendments that deliver a fairer outcome for seasonal horticulture while maintaining appropriate protections for employees. We believe there is still an opportunity to improve the legislation so that it better reflects the realities of seasonal employment.
Benchmarking Profitability to Strengthen Our Industry
Alongside our advocacy work, I am pleased to report that our cherry profitability benchmarking pilot project is now underway with support from funding provided by the Central Otago District Council.
The project is being delivered by Primary Insights and will deliver a dedicated profitability benchmarking framework for New Zealand cherry growers. The objective is straightforward: to provide growers with better information to make better business decisions. The project will compare key performance indicators such as yield, packout, revenue, labour costs and orchard profitability, helping growers understand how their businesses compare against industry benchmarks.
As an industry, we regularly discuss rising costs, productivity challenges, labour efficiency and investment decisions. Yet too often these discussions occur without reliable benchmark data. This project is designed to change that by creating a stronger evidence base that helps identify the drivers of profitability across different orchard systems and business models. We hope that the insights generated will support better business decision-making, strengthen our advocacy work, and help guide future research and development priorities.
I'd like to sincerely thank those growers who have already agreed to participate in the benchmarking pilot. We appreciate how busy everyone is, particularly as attention turns towards the season ahead, and we are grateful for the time and effort participants are contributing to the project. By sharing your insights, you are helping to create a resource that will benefit the wider industry. Participating growers will receive a confidential, individualised benchmark report at the conclusion of the trial, allowing them to compare their business performance against aggregated industry data and identify opportunities for future improvement.
If you are a Central Otago cherry grower and have not yet been contacted but would like to be involved, I encourage you to get in touch. The value of benchmarking improves with participation, and the more representative the dataset, the more useful the findings will be for the industry as a whole.
Good luck for the season ahead, and thank you for your continued support of Summerfruit NZ.