Your guide to Annual Leave

The National Employment Standards (NES) outlines annual leave entitlements

What are the minimum entitlements for annual leave?

•  An employee (other than a casual employee) is entitled to four weeks of paid annual leave for each year of service with the employer

•  An employee classified as a shiftworker is entitled to an additional week of annual leave.

In most cases a shiftworker is defined as an employee who regularly works Sundays and public holidays.

•  An employee’s annual leave is based on ordinary hours worked

•  Annual leave continues to accrue when an employee takes a period of annual leave or paid personal/carer’s leave

•  Annual leave does not accrue on unpaid leave unless it is community service leave or if it is provided for in an enterprise agreement

•  Enterprise Agreements can provide for additional annual leave. Such agreements can also enable employees to purchase additional leave or cash leave out.

When can annual leave be taken?

Employees can apply to take annual leave at any time. Annual leave can be taken at any mutually agreed time between an employee and their employer.

Employers can direct employees to take annual leave if a considerable amount of leave has been accrued. However, there must be a workplace policy that outlines the amount of leave that can be accrued before an employee is directed to take paid annual leave. The direction must also be reasonable
and following factors are relevant:

•  The needs of theemployee and the employer’s business

•  Any agreed arrangement  with the employee

•  Custom and practice of the business

•  The timing of the direction or requirement to take leave

•  The reasonableness of the period of notice given.

The employer must not unreasonably refuse an employee’s request to take paid annual leave. If your employer has unreasonably refused an application for paid annual leave contact your union.

There is no maximum or minimum period of annual leave that must be taken at a time.

If a public holiday falls during annual leave it does not form part of annual leave.

An Enterprise Agreement can include terms regarding paid annual leave.

An Enterprise Agreement can provide for additional conditions including:

• Annual leave may be taken in advance of accrual

• Annual leave may be taken within a fixed period of time after it is accrued

• That a specified period of notice must be given before taking annual leave.

Payments for annual leave

When annual leave is taken, the minimum requirement is that an employee must be paid at their base rate of pay for the ordinary hours they would have worked during the period.

An employee’s base rate of pay is the rate of pay payable to an employee for his or her ordinary hours of work, but not including any of the following:

•  Incentive-based payments and bonuses

•  Loadings

•  Monetary allowances

•  Penalty Rates

•  Overtime

Any other separately identifiable amounts. On termination of employment, an employer must pay an employee in respect to any period of untaken annual leave. This amount includes leave loading.

Can annual leave be cashed out?

An Award or Enterprise Agreement may allow for the cashing out of leave, however the following rules apply:

•  The employee must retain an entitlement of at least four weeks paid annual leave

•  There must be a separate agreement in writing on each occasion

•  The employee must be paid the full amount that would have been payable had the employee taken the leave.

It is unlawful for an employer to force or attempt to force an employee to make or not make an agreement to cash out annual leave. If this occurs then immediately contact your union.

Annual Leave Loading

Employees are entitled to 17.5% leave loading. This amount can be more if an Enterprise Agreement allows.

Is annual leave payable on a transfer of employment?

If an employee moves from one employer to another due to a transfer of business, in most cases the period of service with the old employer will generally count as service with the new employer for the purposes
of entitlements such as paid annual leave and long service leave unless advised otherwise.