As you would be aware, in 2016 the Fair Work Commission (FWC) varied a number of modern awards to include new or updated terms which related to the taking of annual leave. These changes altered award provisions relating to:
· The cashing out of annual leave.
· The taking of annual leave in advance.
· The management of excessive annual leave balances.
· The payment for annual leave.
As a result, most modern awards now include specific terms which set out when an employer can direct an employee to take a period of annual leave when the employee has an excessive annual leave balance. An annual leave balance is generally considered to be ‘excessive’ where an employee has more than:
· 8 weeks of accrued annual leave, or
· 10 weeks of accrued annual leave for shift workers.
While the above changes have now been in operation for close to 12 months, one further change to the annual leave provisions is still yet to come into effect.
Effective from 29 July 2017, most awards will now provide employees who have an excessive annual leave balance with the right to notify their employer that they will be taking a period of leave. The “Excessive leave accruals: request by employee for leave” provisions contained in most modern awards provide that where an employee has genuinely tried to reach agreement with their employer but agreement is not reached (including circumstances where the employer has refused to discuss the request), the employee may give a written notice to their employer requesting to take one or more periods of paid annual leave.
For an employee to be eligible to make such a request, they are required to meet the following criteria:
- The employee must have had at least 8 weeks (10 weeks for shift workers) of annual leave accrued for the last 6 months.
- The employee must not have been given a notice to take excessive leave by their employer that would eliminate their excessive leave.
For such a request to be valid, a period of at least 8 weeks’ notice of the intention to take leave must be provided, and the employee’s request to take a period of excessive annual leave:
- Must not result in the employee having less than 6 weeks accrued annual leave remaining.
- Must be for a minimum period of one week.
- Must not be for a period of leave which is more than 12 months away.
- Cannot be inconsistent with any other leave arrangements that the employee already has agreed to with their employer
- An employee is not entitled to request by a notice more than 4 weeks paid annual leave (or 5 weeks’ paid annual leave for a shift worker) in any period of 12 months.
Where an employee’s request to take a period of excessive leave meets the above criteria, an employer cannot refuse the request.
While these changes will come into effect for a majority of employers on 29 July 2017, it is important to note that some awards do provide for an alternative implementation date for this provision (for example, the Sporting Organisations Award 2010 provides that this provision will come into effect on 20 December 2017).
Information in HR Advice Online guides and blog posts is meant purely for educational discussion of human resources issues. It contains only general information about human resources matters and due to factors such as government legislation changes, may not be up-to-date at the time of reading. It is not legal advice and should not be treated as such.