It is now only a matter of time before awards will be changed to include a mechanism for employees with excess leave credits to set the timing of when they go on leave, following a full bench Fair Work decision. The decision affects virtually all awards and will be phased in to allow employers a chance to reduce their employees’ annual leave credits.
The case arose as part of the modern awards review which the FWC undertakes each four years. Essentially, what the decision will allow is a situation where an employee, who has accrued eight weeks or more annual leave, the right to request to take some leave and if that request is denied by the employer (including even for operational reasons), provided the employee gives the requisite notice, the employee can still go ahead and take leave when they want to.
The unions argued that since employers had a right to require employees to take their leave at set times in many instances, then employees ought to have the same rights. The FWC agreed, and provided the employee gives the requisite notice and there has been an attempt to reach agreement on the timing of leave with the employer, the employee can have their leave when they want it.
The best defence against the liability of large annual leave costs on the balance sheet, and employees dictating when they will take leave, is to insist employees take leave as it was intended – annually.
The case also dealt with other annual leave issues, including leave in advance requests, EFT payment of leave in accordance with the regular pay cycle and cashing out.