Understanding your Rights to Annual Leave
Most modern awards now contain additional annual leave provisions that include the ability to:
- cash out annual leave;
- take annual leave in advance;
- manage excessive annual leave balances; and
- make payment for annual leave during the period of leave.
You are most likely aware that the Fair Work Commission varied a number of modern awards, but do you know all the changes and how they may apply to you?
Cashing out annual leave
You and your employer can make an agreement in writing to cash out your annual leave. Each time an employee wishes to cash out their leave, a new agreement must be made between you and your employer. The agreement must state the amount of leave to be cashed out and the amount of the payment to be made to you, including the date the payment is made.
It is important to note that the payment made to you must not be less than the payment you would have received if you had actually taken the period of leave.
However, there are some rules in relation to how much leave you are able to cash out. The agreement to cash out annual leave must not leave you with an accrued annual leave entitlement of less than four weeks, and you are not permitted to cash out more than two weeks of leave in a 12 month period.
Taking annual leave in advance
You can take a period of paid annual leave before you have accrued an entitlement to take the leave if:
- your award says you are able to; and
- your employer agrees in writing to the advance payment.
The agreement between you and your employer must state the amount of the leave to be taken in advance and the date on which the leave is to start.
So you are aware, if your employment ends prior to you accruing the amount of the entitlement that you have taken in advance, your employer has the right to deduct any money owing from your final pay.
Managing excessive annual leave balances
If you have accrued an ‘excessive’ leave balance of at least eight weeks, you and your employer can reach an agreement to reduce your excessive leave balance.
If you and your employer cannot reach an agreement, then you can make a request in writing that you take a period of paid annual leave. However, you must have had your excessive leave balance for at least six months and your employer must not have issued a direction that would result in your excessive leave accrual being eliminated. Any request must not result in your accrued annual leave balance being less than six weeks.
Your employer can also direct you to take annual leave in writing.
Anderson Gray lawyers are lawyers for employees in Sydney, Australia. We are here to help you. Contact us today if you have any questions about your workplace entitlements.