Annual Leave Entitlement: Answering 3 common questions

Jessica Genio-Ignacio

24 January 2020    |   

Aussies are taking fewer and fewer vacation days each year. While this would ordinarily be good news for employers, there are more drawbacks to business than positives. National Employment Standards (NES) apply to all workers covered by the national workplace relations system, regardless of award and industry. They stipulate all non-casual employees have four weeks in annual leave entitlement, which continue to accrue based on ordinary hours worked. Workers in 24-hour businesses regularly working Sunday shifts and holidays get an extra week of paid leave.  Recent research found Aussies third-worst in the world for taking leaves, just behind Japan and Italy. Each year, the average person fails to use 6 days of their annual leave entitlement. Additionally, 3 in 10 workers admitted to having to leave work early from exhaustion. But 3% of workers have more than ten weeks of annual leave set aside.  Following labour laws for leave allotment Professionals always mention technology has fundamentally changed the business-employee relationship. One of the dangers of implementing any technology communication channel is the expectation for employees always to be “on.” But research has consistently proven that allowing employees to take leaves more often can lead to increased productivity and revenue growth for businesses where they work. So the first step to proper leave management is ensuring you allot the correct amount to all employees. Frequently, the barrier between an employee and a well-deserved holiday is an arduous filing and approval process. However, it’s still necessary for management to evaluate whether operations will be significantly affected by employee leaves.  Software solutions, like a leave calculator, exist which can streamline the process and provide a snapshot of the necessary information that can determine whether someone’s time off gets approved.  Find out how much annual leave your staff has accumulated overtime. Try our free leave calculator that uses a formula based on Fair Work’s National Employment Standards (NES).  Forced leaves: Legal business prerogative? Did your company implement a shutdown the past Christmas and New Year holiday season? Concerns about “forced leaves” during this time are common among workers. In a 2017 study, researchers found 21% of Aussie employees, or 5.3 million individuals, were forced to take more than two weeks off over Christmas. Some employees are frustrated by forced leave policies, as they see it as a waste of their annual leave entitlement. Newer employees especially may not have enough credits to sustain a forced leave, bringing balances into the negative. On the other hand, a business needs to avoid excess costs from overstaffing during slow periods.  Here’s what the Fair Work Ombudsman has to say: Employers can direct employees to use their annual leave only if their governing award or registered agreement allows it Businesses need to have official shutdown protocols during periods like Christmas or New Year Employers may direct employees to take leaves when they accumulate excess annual leave (more than eight weeks, ten for shift workers) In essence, the practice is legal for most employers as long as they give due notice to their workforce. However, management should still evaluate whether this policy does more to destabilise the balance between employee wellness and saving costs.  Annual leaves: Usable in lieu of personal leave? Employees have a minimum of ten personal/carer’s leave which accrue from year to year under the NES. Usually, once someone has used up all their personal leave, they’re instructed to take unpaid personal leave. Company policy also often exists wherein employees must provide proof and documentation after taking these types of leaves.  Under section 89 of the Fair Work Act 2009, it’s legal for an employee to have annual leave replaced with personal leave credits if they get sick during a period of using annual leave provided they supply adequate documentation. On the flip side, some workers lacking personal leave credits may request this balance to be taken out of their annual leave instead next time they get sick. Is this above board? The short answer: yes, but according to an organisation’s discretion. While an employer cannot direct an employee to take annual leave instead of personal leave, they may grant the request if a worker requests and provides sufficient documentation. However, they are still well within their rights to refuse. Read more: Working Hours and Leave Policy State-based rules: Distinct from annual leave? There are particular types of leaves primarily determined by state-based rules. Long service leave is one of them. These are additional vacation days someone gets above their annual leave entitlement if they have been working with an employer for a certain length of time. Queensland, for example, has it set for an additional 8.6667 weeks of paid leave after 10 years of continuous service. The Fair Work website lists these rules for depending on location here. Note that some states also allow portable long service leave for workers in the security, community services, building and construction, coal mining, and contract cleaning industries.  Compassionate leave, on the other hand, is used separately from annual leave or personal/carer’s leave. Compassionate leave comes into play when a worker’s immediate family or household passes away or contracts a life-threatening illness or injury. Minimum entitlement is 2 days nationwide, but whether casual employees are entitled to paid or unpaid leave varies by region. Managing workers’ annual leave entitlement is a balance between complying with NES regulations and employee well-being. Using workforce solutions like Tanda takes the guesswork out of leave and pay calculations. It frees more time for managers to make decisions with both staff well-being and productivity in mind. Give it a try today. No credit card required.

Aussies are taking fewer and fewer vacation days each year. While this would ordinarily be good news for employers, there are more drawbacks to business than positives.

National Employment Standards (NES) apply to all workers covered by the national workplace relations system, regardless of award and industry. They stipulate all non-casual employees have four weeks in annual leave entitlement, which continue to accrue based on ordinary hours worked. Workers in 24-hour businesses regularly working Sunday shifts and holidays get an extra week of paid leave. 

Recent research found Aussies third-worst in the world for taking leaves, just behind Japan and Italy. Each year, the average person fails to use 6 days of their annual leave entitlement. Additionally, 3 in 10 workers admitted to having to leave work early from exhaustion. But 3% of workers have more than ten weeks of annual leave set aside. 

Following labour laws for leave allotment

Professionals always mention technology has fundamentally changed the business-employee relationship. One of the dangers of implementing any technology communication channel is the expectation for employees always to be “on.” But research has consistently proven that allowing employees to take leaves more often can lead to increased productivity and revenue growth for businesses where they work.

So the first step to proper leave management is ensuring you allot the correct amount to all employees. Frequently, the barrier between an employee and a well-deserved holiday is an arduous filing and approval process. However, it’s still necessary for management to evaluate whether operations will be significantly affected by employee leaves. 

Software solutions, like a leave calculator, exist which can streamline the process and provide a snapshot of the necessary information that can determine whether someone’s time off gets approved. 

Find out how much annual leave your staff has accumulated overtime. Try our free leave calculator that uses a formula based on Fair Work’s National Employment Standards (NES). 

Forced leaves: Legal business prerogative?

Did your company implement a shutdown the past Christmas and New Year holiday season? Concerns about “forced leaves” during this time are common among workers. In a 2017 study, researchers found 21% of Aussie employees, or 5.3 million individuals, were forced to take more than two weeks off over Christmas.

Some employees are frustrated by forced leave policies, as they see it as a waste of their annual leave entitlement. Newer employees especially may not have enough credits to sustain a forced leave, bringing balances into the negative. On the other hand, a business needs to avoid excess costs from overstaffing during slow periods. 

Here’s what the Fair Work Ombudsman has to say:

  • Employers can direct employees to use their annual leave only if their governing award or registered agreement allows it
  • Businesses need to have official shutdown protocols during periods like Christmas or New Year
  • Employers may direct employees to take leaves when they accumulate excess annual leave (more than eight weeks, ten for shift workers)

In essence, the practice is legal for most employers as long as they give due notice to their workforce. However, management should still evaluate whether this policy does more to destabilise the balance between employee wellness and saving costs. 

Annual leaves: Usable in lieu of personal leave?

Employees have a minimum of ten personal/carer’s leave which accrue from year to year under the NES. Usually, once someone has used up all their personal leave, they’re instructed to take unpaid personal leave. Company policy also often exists wherein employees must provide proof and documentation after taking these types of leaves. 

Under section 89 of the Fair Work Act 2009, it’s legal for an employee to have annual leave replaced with personal leave credits if they get sick during a period of using annual leave provided they supply adequate documentation. On the flip side, some workers lacking personal leave credits may request this balance to be taken out of their annual leave instead next time they get sick. Is this above board?

The short answer: yes, but according to an organisation’s discretion. While an employer cannot direct an employee to take annual leave instead of personal leave, they may grant the request if a worker requests and provides sufficient documentation. However, they are still well within their rights to refuse.

Read more: Working Hours and Leave Policy

State-based rules: Distinct from annual leave?

There are particular types of leaves primarily determined by state-based rules. Long service leave is one of them. These are additional vacation days someone gets above their annual leave entitlement if they have been working with an employer for a certain length of time. Queensland, for example, has it set for an additional 8.6667 weeks of paid leave after 10 years of continuous service.

The Fair Work website lists these rules for depending on location here. Note that some states also allow portable long service leave for workers in the security, community services, building and construction, coal mining, and contract cleaning industries. 

Compassionate leave, on the other hand, is used separately from annual leave or personal/carer’s leave. Compassionate leave comes into play when a worker’s immediate family or household passes away or contracts a life-threatening illness or injury. Minimum entitlement is 2 days nationwide, but whether casual employees are entitled to paid or unpaid leave varies by region.

Managing workers’ annual leave entitlement is a balance between complying with NES regulations and employee well-being. Using workforce solutions like Tanda takes the guesswork out of leave and pay calculations. It frees more time for managers to make decisions with both staff well-being and productivity in mind. Give it a try today. No credit card required.

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How much do full-time staff really cost?

Being in the business of managing staff costs, we often hear people say that casual staff just cost so much more than their full time equivalents. I mean, that extra 25% is a killer, right? Especially for staff who work a fairly consistent schedule each week, it’s almost like free money. For a while there I went along with that, not really giving it much thought. But today the thought struck me – casuals miss out on plenty of benefits afforded to full and part timers, so are they really better off? I decided to investigate further. What follows may surprise you. First – how many days in a year does a full time employee work? Weeks in a Year: 52 Working Days in a Year: 260 So far so good. We’re going to ignore the 1 or 2 days that we’re off by, for the sake of a nice round number. Next, let’s look at this full time employee’s entitlements, in days. Annual Leave: 20 (4 weeks) Personal Leave: 10 (2 weeks) Public Holidays: 10 We’ll assume a 7.6 hour work day and 17.5% leave loading. So how many hours of leave are we paying? Annual Leave – Base: 152 Annual Leave – Loading: 26.6 Personal Leave: 76 Public Holidays: 76 Total Hours of Leave Paid: 330.6 Earlier we calculated how many days of work one can work in a year, now let’s subtract leave taken to get a more accurate figure. Days of Leave Taken: 40 Actual Days Worked in a Year: 220 Actual Hours Worked in a Year: 1672 Divide 330.6 (hours of leave paid) by 1672 (hours worked) and we get 19.77%. Remember, we are comparing this to the 25% loading paid for casual staff. So from this perspective, yes, your full time and part time staff are still cheaper – but only by 5.23%. And even that number is probably on the low side. We ignored long service leave and maternity leave because they are a bit more unreliable. Both they are also costs (or accruals) that can definitely add up! When you take into account the fact that you only have to pay casuals when you need them, it’s easy to see why more and more Australian employers are turning to casual staff. According to the ABS, this has been growing steadily since the 90’s, and today over 1 in 5 jobs in Australia are casual.

Awards & Rostering    |   

Easter Penalty Rates 2015 — What you need to know about paying staff

Easter is coming up soon, and that means two things! A new season of Game of Thrones to feast on, and – perhaps less excitingly – public holiday rates to pay staff. As a business owner, accountant, or bookkeeper, it’s important to be aware of how public holiday rates over Easter and ANZAC Day should be paid in your state. First, let’s see when the holidays will be in 2014. You might be surprised! If your business is open on any of these public holidays, you’ll need to pay staff the appropriate public holiday rates. You should check your award, which will tell you exactly what multiplier or penalties to apply, often under a Public Holidays section. A common multiplier is 2.5x. Some businesses pay staff salaries, or pay casually “above award”. Public holiday penalties still apply! If you have a contract, it should cover this – check with Fair Work if you are unsure. Staff who don’t work on a public holiday If you have full or part time staff who should have worked on any of the weekday public holidays – Good Friday, Easter Monday, and Easter Tuesday in specific cases – they are still entitled to pay, even if they do not work. Generally you’ll pay at base rate for the hours staff would have been entitled to. Of course, if staff do work on the day, you’ll pay at a higher rate as dictated by the award (see above). But keep in mind: this only applies if they usually work on that day. For example, a part timer in Queensland who generally works Tuesday to Thursday probably wouldn’t get paid the public holidays because there’s no public holiday on those weekdays. Check your award/agreement to be sure! If your award dictates how rostered days off work, you should check to see if staff with an RDO on a public holiday are still paid. In some states, some kinds of businesses are not permitted to open on public holidays due to trading regulations. If this applies, you will probably still be required to pay staff who would otherwise work on that weekday. Again, if you’re not sure, it’s best to ask. Staff who work on a day that isn’t a public holiday Keep in mind that the rest of the award doesn’t shut off just because it’s Easter. For example, if you are in Tasmania and pay Saturday rates, you’ll still need to pay these on Easter Saturday (which is not a public holiday for you). Did you know… If an employee takes sick leave around a public holiday (eg. Thursday April 24 to Monday April 28), they still get paid the public holiday if they were otherwise supposed to work that day (ie. full/part time) If an employee takes annual leave, public holidays during the leave period don’t count towards their annual leave balance Public holidays do not need to be paid for staff on unpaid leave Staff cannot be forced to work on a public holiday if they have reasonable grounds for doing so. Common reasons include: the amount of notice given, family responsibilities (especially over Easter), and whether one could reasonably expect the business to be open on a public holiday. Tanda’s employee time clocks automatically interpret industry awards – including public holidays – so you can be sure you paid staff right, without tedious manually data entry Add the Fair Work Infoline to your speed dial, they are always happy to help. The number to call for any payroll queries is 131 394. Note: none of the above constitutes formal payroll advice. Always check with your accountant, bookkeeper, or Fair Work.

Industry Insights    |   

Giving Employee Feedback: 7 Ways to Constructively Deliver Bad News

Wouldn’t management be so much easier if everyone just did their job? You might feel sometimes like your job description would better match that of a babysitter than a business manager. But the sad fact is, unless you provide your staff with proper leadership; productivity, efficiency, morale, and overall quality of work will suffer. Part of effective management is providing your personnel with feedback when they’ve done something incorrectly, or perhaps just less correctly than you would prefer. Ideally, you want to train your workforce to act as you would in a given situation. This takes time, patience, and consistent positive reinforcement. So how can you communicate to your beautiful and unique snowflakes that they’re not meeting your standards without alienating, offending, or irritating them? Here is a list of best practices that can help you deliver a difficult message in ways that will improve employee attitude, engagement, and performance. 1.      Focus on Positives Even if you’ve been stuck with the worst employee in the world, even if they come into work smelling like a Cypress Hill concert in un-ironed slacks made of organic hemp, you’ve got to find a silver lining. To be clear, this doesn’t mean sugar-coating the negatives. It just means balancing criticism with praise. Build employee confidence first, then present avenues for improvement. The thing to remember about creating a harmonious work environment is it begins and ends with being nice. The simplest gestures can prevent resentment, discontentment, and hurt feelings. Keep your employees happy, and you’ll be a much happier manager. 2.      Objectivity This can be tough. It’s important not to let your emotions get in the way of effective management. Subjectivity can get you into all sorts of trouble: favouritism, nepotism, and a plethora of other –isms worth avoiding. A cool head is needed for command decisions, plus your employees will reflect the attitudes you present to them. Come to work angry, and you’re likely to look out and see an office rife with cantankerousness. 3.      Always Deliver Negative Feedback in Person It’s a busy day, you hear a bad report, and you want to get it handled quickly. So you just shoot of an email with a textual reprimand. A very tempting scenario, but not the best idea. People can read into messages more or less than you intend. If there’s a problem with an employee important enough for you to respond personally, then it’s important enough to respond to it in person. 4.      Time your Feedback Correctly Timing is everything. You have to take the opportune moment. For minor infractions, or something of a sensitive nature (a conflict between employees for example), allow a bit of time to pass so that tempers might cool before addressing the situation. Similarly, don’t call an employee out in front of their peers. Wait for the right moment, when they’re not under scrutiny, to approach. You don’t want to embarrass an employee, and you never know what can get the blood running to someone’s cheeks. 5.      Location, Location, Location Along the same lines as timing, the location of a performance review can have a great impact on how receptive an employee might be to your suggestions. Go to an empty conference room, any neutral ground will do. 6.      Pay Attention to How You’re Being Perceived This means watching your phrasing and body language. Present problems in a sympathetic light, and avoid negative syntax: “I don’t think… You shouldn’t… This isn’t…” Maintain eye contact, without being creepy. Keep gesticulations, mannerisms, and movements calm and casual. Aggression is an animal instinct, don’t release the beast during a performance review. 7.      Be Clear With Your Criticisms, Leave No Room for Interpretation Convey your meaning quickly, clearly, and without ambiguity. Be direct with your employees, let them know exactly what you disapprove of, how they can improve, and if there’s a need for it: a warning as to what continued instances of the undesired behavior will result in. Alternatively, reinforce desired actions. If they’ve done anything right at all, mention it, and offer praise. Building an effective team is a complicated process, but armed with common sense and a healthy dose of positivity, you can put together an office environment that runs like a well-oiled machine.

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About the author

Jessica Genio-Ignacio

Jessie is a PR and Content Writer interested in the impact of tech and digital on people and businesses.

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Being in the business of managing staff costs, we often hear people say that casual staff just cost so much more than their full time equivalents. I mean, that extra 25% is a killer, right? Especially for staff who work a fairly consistent schedule each week, it’s almost like free money. For a while there […]

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Wouldn’t management be so much easier if everyone just did their job? You might feel sometimes like your job description would better match that of a babysitter than a business manager. But the sad fact is, unless you provide your staff with proper leadership; productivity, efficiency, morale, and overall quality of work will suffer. Part […]

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