"Canterbury tavern owners have been ordered to pay $30,000 by the Employment Relations Authority (ERA) for 30 breaches of the Holidays Act. Owners for more than 30 years have been penalised for failing to provide three employees with minimum holiday rights, by treating them as casual employees despite them being permanent staff"
While it's good the employer had "no intention to actively exploit or disadvantage the employees" in reality they did.
I have seen this situation many times before where an employer "Assumes they know" the law (we all know what they say about assuming) and yet what they think is way off the mark.
This assumption of what constitutes "casual" and therefore what the employee is entitled to is one which trips employers up all the time.
Especially where an employee might start off as a true casual but over time their role changes and then expands until they are working more hours and are effectively permanent.
This is something you should be monitoring all the time.
Are you sure about the law and that your payroll system is compliant?
If you are not 100% certain then ask someone who knows (not your mate who thinks they know)