AHRI:ASSIST

Leave

Over the period of their employment, individuals will have different needs requiring them to take leave from the organisation.  This section covers the various leave types available to employees, the legal requirements relating to leave and how applications for leave should be handled. 

The Fair Work Act 2009 (Cth) provides for various minimum entitlements for employees to take paid and unpaid leave of absence, these entitlements include:

  • 20 days' paid annual leave per annum (permanents only)
  • 10 days' paid personal/carer's leave per annum (permanents only, although casuals may take up to 2 days' unpaid carer's leave per annum)
  • community services leave
  • at least 10 public holidays each year
  • 2 days' compassionate leave for each occasion
  • 12 months' unpaid parental leave.

In addition, State and Territory legislation provides for an entitlement to paid long service leave after 10 years' continuous service (2 months or 3 months in South Australia and Northern Territory).

Enterprise agreements and employment contracts may provide for additional entitlements to leave of absence (paid or unpaid) Other types of leave may be provided in employment contracts or enterprise agreements including study leave, domestic violence leave and trade union training leave.

For more information on leave, please see our:

FAQ's Leave

An employee wants to take a period of unpaid leave to go on a holiday, but they have not accrued sufficient annual leave. Do I have to approve this? What do I do if the employee says they are going anyway?

You do not have to approve unpaid leave to take a holiday.  If the employee threatens to take the leave anyway, you can warn the employee that you will terminate their employment if they take an unauthorised absence from work.

You could offer to advance them paid annual leave on condition that they authorise you to deduct the amount advanced from any amounts otherwise owing to the employee if their employment ends before accruing the amount of leave advanced.

An employee has taken approved annual leave; however, they fall ill/are injured during this period. Is the employee entitled to be paid annual leave or personal leave for that period?

Depending on how section 89 (2) of the Fair Work Act is interpreted, there is no strict legal entitlement for an employee to take personal leave during a period of annual leave. However, there is room for HR intervention.
If the employee can satisfy the notice and evidence requirements of the personal/carer's leave provisions of the Fair Work Act, then yes, that period of time can be taken as personal/carer's leave assuming that the employee has an available personal/carer's leave balance.
So in many cases where a person becomes sick during annual leave, a decision is made on the basis of evidence and good HR judgement to cancel the annual leave and replace it with personal leave.

If a full-time employee moves to a part time position, should their accrued annual leave be paid out?

No.

What happens if the rate of pay per hour is different after moving to part time? (see original question above).

Annual leave payments are calculated on the rate that would have been paid if the employee had worked ordinary hours for the leave period.  In this case the leave payment should be calculated on the different pay rate.

If evidence of misconduct about an employee arises when he/she is taking annual leave, do I have to wait until the employee is back from leave before investigating?

No, provided you give the employee a reasonable opportunity to respond to the allegations and the evidence when he/she returns from leave.

What factors are taken into account in determining whether an employer can "reasonably" refuse a request for annual leave?

This is not defined in the FW Act.  However, we expect that it would depend on the notice the employee has given of the intention to take leave, the notice the employer has given of the refusal, the grounds for the refusal and the impact that the refusal will have on the employee.

How do I calculate leave pay?

You work out how much the employee would have received at the base rate of pay if they worked ordinary hours during the period of the leave.  Base rate refers to wages and salary and does not include overtime, allowances or other separately identifiable amounts of remuneration. Some employees may be entitled to annual leave loading as stipulated in their employment contract, modern award or enterprise agreement, so this will need to be paid in addition to the base rate.

When do I have to pay leave loading?

You need to check whether this entitlement arises under a modern award, enterprise agreement or employment contract.  If there is such an entitlement you would ordinarily have to pay this when and employee takes approved annual leave, as well as on unused accrued leave paid out on termination.

My business can't afford to be without my employees for four weeks a year, can I force them to cash out their annual leave?

The cashing out annual leave process was previously prohibited by a number of Modern Awards, meaning that employees had to take time off to receive their annual leave entitlements.  However, following the 2016 decision by the Fair Work Commission, most Modern Awards have been amended to allow employees to ‘cash out’ up to 2 weeks of annual leave in any 12 month period; providing that they have:

·         signed a written agreement with their employer; and

·         will have at least 4 weeks of annual leave left after the cash out takes effect.

The agreement to cash out annual leave must specifically state the amount of leave being cashed out, the amount that will be paid to the employee and the date that payment will be made. Most awards now provide a template agreement for employer to use when an employee is cashing out annual leave.

Both you and your employee must sign the agreement (as well as a parent or guardian of the employee if they are 18 years old).  As part of your record keeping obligations, you must keep a copy of the agreement for at least 7 years.

Can I direct my employees to take annual leave and in what circumstances?

You can require employees to take annual leave if the requirement is reasonable.  Factors determining reasonableness include the reasons for imposing the requirement and the notice given of the requirement.  It will be reasonable during Christmas shutdowns or when accrual is excessive (provided the employee understand when leave is excessive and is given reasonable warning that he or she needs to run down accrual). Modern awards and enterprise agreements often provide clauses dealing with directions to take annual leave so these should be consulted when considering a direction of this nature.

Does an employee who is absent from work and receiving workers compensation payments accrue annual leave during this time?

Yes, if the compensation is paid under Commonwealth (or Queensland, ACT and SA) workers compensation legislation.  In other cases, possibly not.

A decision (Anglican Care v NSW Nurses and Midwives' Association [2015] FCAFC 81) means that NSW employees receiving workers' compensation are also entitled to annual leave accrual.  In Victoria and WA, which have similarly worded provisions about employee entitlements for workers' compensation, it is likely that the question about annual leave accrual would be decided the same way. In other words, the law actually has to say ‘no’ if it is going to mean ‘no’.

In Queensland, South Australia, and the ACT, the compensation laws in those states already confirm that employees on workers' compensation continue to accrue annual leave.

Tasmania is currently the only jurisdiction that expressly says employees may not take annual leave and workers' compensation at the same time.

Can an employer direct staff to take their accrued LSL?

Under the Long Service Leave Act (1955), employers must give their employees who are eligible to take long service leave at least one month's notice of the date from which it is proposed that the worker's long service leave shall be given and taken. Generally speaking, the employer and employee will agree to a date and period of leave that suits both parties, however, provided the requisite notice period is provided to the employee, an employer could direct them to take the leave.

If an employee has transferred to work overseas within the same company and then came back to Australia, would the time spent working overseas qualify to continue to accrue long service leave (VIC state)?

Part 2 12. of the Victorian Long Service Leave Act specifies that an employee's service (for the purposes of accumulating long service leave) will be continuous during a period of absence from work that is approved by the employer (paid or unpaid) and is specified in the employee's employment agreement. Accordingly, if the employee's employment agreement was varied to account for their change in location, this would count as service and the employee could be eligible for long service leave pay.

Information Sheets

Community service leave

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Defence Services leave

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Flexible working arrangements

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Keeping in touch while on parental leave

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Paid parental leave

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Parental leave

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Requiring an employee to commence parental leave early

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Returning from parental leave

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Transfer to a safe job

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Unpaid special maternity leave

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Checklists

Considering and responding to flexible work requests

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Parental leave timeline

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Pre-Parental leave departure

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Responding to requests for extended parental leave

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Guidelines

Flexible work requests under the National Employment Standards

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Legal considerations when returning parents to work

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Long Service Leave entitlements across Australia

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Pregnancy at work

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Policies and procedures

Leave Policy

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Templates

Letter approving parental leave application

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Parental leave communication plan

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