An important part of running a business with employees means dealing with annual leave requests. Annual leave forms part of the National Employment Standards (NES) and applies to all employees covered by the national workplace relations system.

The NES establish the minimum entitlements to annual leave, how and when annual leave can be taken, and the pay rate employees should receive. An award, employment contract, enterprise agreement or other registered agreement can’t provide for conditions that are less than the NES or exclude the NES.

Can my employees even take annual leave in advance?

So, an employee has requested to take annual leave but they do not have enough leave accrued. What now? While some awards and registered agreements allow an employee to take annual leave in advance if the employer agrees in writing, the employer is under no obligation to grant an employee time off (paid or unpaid) for annual leave if there is no entitlement.

What should I consider before approving an advanced annual leave request?

One of the main concerns managers have when approving requests for advanced annual leave is an employee leaving the business before the annual leave has been accumulated back. With this in mind, some awards and agreements do allow the employer to deduct the amount still owing from the workers final pay. For employees under 18 years of age, a parent or guardian must also agree in writing to the deduction.

What should I include in an advanced annual leave written agreement?

In the instance that an employer agrees to an employee taking annual leave in advance, it is good governance and best practice to draw up a written agreement. The agreement should:

  • Be signed by both the employer and the employee
  • Be signed by the employee’s parent or guardian if the employee is under 18 years of age
  • State how much annual leave is being taken in advance
  • State the date the leave will start

Additionally, it should include a clause that outlines that if an employee’s employment ends before the annual leave is accrued back, the employer is authorised to deduct the amount still owing from the employee’s final pay.

This agreement must be kept by the employer along with the employee’s records.

As a business owner, you should approach employees’ requests to take annual leave in advance by always checking the relevant awards, enterprise agreements or other types of registered agreement that apply to your employees. Additionally, having a written agreement in place provides clarity and ensures any agreement is valid and that the terms within it are enforceable.

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