TTIA is regularly asked by members their rights and obligation regarding the operation of annual leave entitlements.
Significance of mutual agreement
The NES specifies that the timing and duration of annual leave must be agreed between the employer and employee. As such, an employee generally cannot insist on taking annual leave unless it has been approved by the employer.
An employer must not unreasonably refuse an employee’s request to take annual leave.
There are limited circumstances where an employee can be required to take annual leave and an employee can insist on taking annual leave.
Requiring employees to take annual leave
In limited circumstances, an employer or employee can insist on the timing and duration of annual leave.
An employee may only be required to take annual leave in the following circumstances:
- Shut down/closure terms: in accordance with shut down/closure terms in a Modern Award or Enterprise agreement, so long as those terms are reasonable
- Excessive leave terms: in accordance with excessive leave terms in a Modern Award or Enterprise agreement, so long as those terms are reasonable
- Other Award/Agreement terms: individual Modern Awards and Enterprise Agreements may specify other occasions where an employee may be reasonably required to take annual leave, so long as those terms are reasonable
- Award-free employees: in accordance with a reasonable requirement for an award-free employee (who is also not covered by an enterprise agreement) to take annual leave. Examples of a ‘reasonable requirement’ for an award-free employee to take annual leave include where the employee has accrued excessive leave, or where the employer’s enterprise is being shut down for a period.
Taking annual leave in advance
Employers and award-free employees can reach agreements about taking annual leave in advance. Modern awards and enterprise agreements may also include terms about taking annual leave in advance.
Most modern awards include a term specifying that an employer and employee can agree in writing to a period of annual leave being taken in advance. In most cases, the modern award requires that any such agreement:
- States the amount of leave to be taken in advance and the date on which leave is to commence; and
- Be signed by the employer and employee (and the employee’s parent/guardian if the employee is under 18 years old)
- Must be kept as an employee record
It is important to check the relevant modern award/enterprise agreement for the terms applying to your employee.
What if the employee owes annual leave when their employment ends?
Most modern awards include a term allowing employers to recover monies owing to them if an employee has taken annual leave in advance and has not accrued sufficient leave by the end of their employment to justify the amount of leave taken in advance.
It is important to check the relevant modern award/enterprise agreement for the terms applying to your employee.
Use of Annual Leave Policies, Procedures and Application Forms
Employers can use leave policies and procedures to specify expectations for how and when requests for annual leave should be submitted, and to specify periods of time when annual leave requests may not be approved due to operational requirements. As long as these policies and procedures are reasonable, an employee may be expected to comply with them before a leave request is approved.
It is recommended that requests for annual leave be required in writing (using an application form if practicable), so that these can be retained as employee records to assist with time and wages record keeping.
If you require assistance with forms, contact TTIA by email at ttia@ttia.asn.au as we have a comprehensive set of templates available to Members.