Annual Leave Entitlement: Answering 3 common questions

6 min read ·  

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

National Employment Standards (NES) apply to all workers covered by the national workplace relations system in Australia, regardless of award and industry. They stipulate all non-casual Australian 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 Australian 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 Australian 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 Australian 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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