When it comes to a healthy work-life balance, annual leave is essential to ensure employees find the right mix of time and energy to spend on work responsibilities and personal activities. So, when it comes to annual leave and the law, are all workers entitled to it? Are employers always obliged to give leave requests the tick of approval? Can employers force employees to take leave when it may not suit them?
Annual leave entitlements are governed by specific regulations that depend on factors like employment contracts, enterprise agreements and employment law. Employers have obligations and rights when it comes to granting or declining annual leave applications, so it is crucial to understand the dos and don’ts to foster a healthy work-life balance, create a positive workplace culture, and avoid risk to the business.
Who is entitled to annual leave and how is it calculated?
Annual leave entitlements are outlined in the National Employment Standards and differ depending on the nature of employment.
Full-time employees in Australia accrue 4 weeks of annual leave per year, which equates to 20 days per year. While part-time employees are also entitled to 4 weeks of annual leave per year, it is accrued at their pro rata rate. Casual employees do not accrue any annual leave.
Can employers reject an annual leave request?
If an employee has accrued annual leave, they are entitled to apply for it.
Employers can reject an annual leave request but only on reasonable grounds. These are limited, but might include seasonal demands, such as an accountant at the end of the financial year, or other staff shortages. Operational needs are important, however, employers should be mindful when refusing annual leave as this can have other negative impacts, such as to staff morale and engagement.
While there are no general requirements for employees to give notice for annual leave, some notice requirements may be outlined in an Award, enterprise agreement or company policy. Businesses can include provisions in any leave policy around employees providing as much notice as possible, as the notice provided is a consideration in the reasonableness of accepting or rejecting the request.
Can employers force employees to take annual leave?
Annual leave accrues indefinitely and does not expire. As it is an entitlement, employees may prefer to take it when it suits such as saving it up for a big holiday, or building it up for when it is really needed. This approach may not suit all employers, as untaken annual leave is recorded as a liability on balance sheets.
There are two situations where an employer can direct employees to take leave; during a Christmas shutdown period or where an employee has accrued excessive leave. However, if employees are covered by an Enterprise Award or Agreement, it is essential to check the provisions about directing employees to take excess annual leave.
What happens to untaken annual leave?
Whether an employee leaves the business voluntarily, or if they are terminated or dismissed because of redundancy, employers still have an obligation to pay out any unused annual leave. Accrued and untaken annual leave must be paid to the employee upon the cessation of their employment, regardless of the reason for the cessation.
Can an employer dismiss an employee on annual leave?
While it is not strictly illegal to dismiss an employee while they are on annual leave, it is unlawful to dismiss an employee because they take annual leave. Additionally, if an employee is on annual leave, it is likely that a dismissal would be procedurally unfair.
Annual leave is an important ingredient for work-life balance and a key driver for employees, so it is important to understand your legal obligations. Want more details? Get in touch with our team today.
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