By Cala Ahmed

Did you know that annual leave begins accumulating from an employee’s first day of work and they can take leave as soon as its accrued? Ensuring staff can take time away from work and enjoy a well-earned break is not only something employees look forward to, but it’s also beneficial from an engagement perspective for business owners. While most management teams are generally aware of annual leave entitlements, sometimes navigating the ins and outs can be challenging. Particularly where you may be lacking a comprehensive understanding of this workplace right.

In this article, we answer three frequently asked questions about annual leave and explain why giving staff a chance to unwind, unplug, and relax is beneficial to both the business and the employee.

In any case of uncertainty, we recommend contacting our 24/7 Telephone Advisory Service Line and speaking with a workplace relations consultant to seek tailored advice.

1. Can I refuse my employee’s request to take annual leave?

You cannot unreasonably refuse an employee’s request to take annual leave, however, the business can decline a request in particular circumstances. If the business can demonstrate that the refusal for annual leave is based on ‘reasonable business grounds’, a refusal may be acceptable. Reasonable circumstances may include that an employee doesn’t have sufficient leave accrued, other staff will be on leave at the same time, or it’s a particularly busy time of the year for your business.

HR Assured often recommends developing a Leave Policy to ensure that employees are informed of the business’s expectations regarding taking and requesting annual leave.

2. Can I direct an employee to take a period of annual leave?

You can direct an employee to take a period of annual leave, however, certain conditions must be met.

Most modern awards and Enterprise Agreements provide that an employer can direct an employee to take annual leave where that person has an excessive accrued leave balance. Similar provisions under the Fair Work Act 2009, apply to employees who aren’t covered by an award or Enterprise Agreement. An employee is generally regarded to have an excessive leave balance where they have eight or more weeks of annual leave accrued, however, it’s important to check the applicable award or Enterprise Agreement.

For employees covered by an award or Enterprise Agreement, the direction to take annual leave generally must be given in writing with at least eight weeks’ notice and must not result in the employee’s remaining accrued leave entitlement to paid annual leave being less than six weeks.

3. Do I have to pay my employee annual leave loading?

Many awards and Enterprise Agreements provide that leave loading is payable on a period of annual leave. You must pay the leave loading if the worker is covered by an award or Enterprise Agreement that prescribes it. Leave loading is typically 17.5 per cent of the employee’s minimum hourly rate, however, different conditions may apply if the employee is a shift worker. The loading will be payable regardless of whether the annual leave is taken or paid out on termination.

Hot tip: most awards provide that an employee can cash out up to two weeks of paid annual leave in any 12-month period, so long as they have at least four weeks of accrued annual leave remaining. Employers must ensure that the correct written agreements are completed before an employee cashes out annual leave. Similar provisions apply for award-free employees and some Enterprise Agreements.

For more detailed support and recommendations tailored to your business’s needs, clients should contact the 24/7 Telephone Advisory Service. If you would like more information about the benefits of becoming an HR Assured client, contact us today for an informal chat.

Cala Ahmed is a Senior Workplace Relations Consultant and assists a variety of clients with employee relations and compliance matters. She is currently studying for a Bachelor of Business/ Law.