Small business owners are so busy running their businesses that they often can’t keep up with changes in Australian employment law. This can be very dangerous as Australia has some of the most complex employment laws in the world. In this blog I’ll be reviewing just one tiny aspect of Australia’s Modern Award – Annual Leave.
Many modern awards have recently been varied to incorporate changes to the way annual leave can be managed in the workplace. There are changes to rules for:
- cashing out annual leave
- taking annual leave in advance
- managing excessive annual leave balances
- payment of annual leave.
Awards are still being updated so, if in any doubt, make sure you visit the Fairwork Australia website for all the latest updates on:
1. Cashing out annual leave
Most awards now allow employers and employees to agree to have some of their annual leave paid out. Employees can cash out up to two weeks of annual leave if they:
- have a signed written agreement with their employer (if the employee is under 18 years of age their parent or guardian must also sign the agreement)
- have at least 4 weeks’ annual leave left after the cash out
- don’t cash out more than 2 weeks each 12 months.
2. Taking leave in advance
Most awards now allow employers and employees to agree to take annual leave before they have accrued it. The agreement needs to:
- be signed by both the employer and the employee (if the employee is under 18 years of age their parent or guardian must also sign the agreement)
- say how much annual leave is being taken in advance
- say the day the leave will start.
3(a) Managing excessive annual leave balances – by employer direction
An employee has accrued excessive annual leave if they have accumulated at least 8 weeks of leave, or 10 weeks if they are a shift worker. If an employee has an excessive annual leave balance and can’t agree with their employer on when to take it, the employer can:
- tell the employee, in writing, that they must take annual leave
- give the employee at least 8 weeks’ notice (but not more than 12 months) of when the leave will start.
Individual awards will also include rules about how long the period of leave has to be and how much leave the employee has to have left afterwards.
3(b) Managing excessive annual leave balances – by employee notice
Some awards have a new clause allowing employees with excessive annual leave balances to tell their employer that they will take a period of leave. This clause takes effect from 29 July 2017.
Until July 2017, employees who are covered by these awards and have large amounts of accrued annual leave; should follow the normal process for requesting annual leave.
4. Payment of annual leave
Some awards say that annual leave has to be paid before the employee starts their leave. A new clause has been added to these awards. Now, if an employee is paid by electronic funds transfer (EFT), they can continue to be paid using their usual pay cycle during periods of leave.
The Fair Work Ombudsman is an independent statutory office whose jurisdiction is set out in the Fair Work Act (2009). Their services are free to all employers and employees in Australia and their role is to:
- promote harmonious, productive and cooperative workplace relations
- ensure compliance with Australian workplace laws
- monitor certain 457 subclass visa arrangements.
For more Modern Award information, go to the Fairwork Australia Ombudsman website.
Need more help navigating Australian Employment law and untangling Modern Awards as they apply to your business?
Did you know that BASic Bookkeepers subscribe to Workforce Guardian?
Workforce Guardian provides affordable HR solutions designed to specifically help Australian employers achieve best-practice HR management and full compliance with Australia’s increasingly complex employment laws. Upon request, BASic Bookkeepers can utilise this service to research, check and validate any unclear or unknown Fair Work provisions. Advice from Workforce Guardian can be provided to you, in writing. Costs associated with accessing their expert advice are charged at your standard hourly rate.
BASic Bookkeepers can help!
