Changes to rules on annual leave

Changes to rules on annual leave

From Workplace Bulletin 15 June 2015

Every 4 years, the 120 modern awards that cover Australian employees are reviewed under the Fair Work Act by the Fair Work Commission (FWC).

Las week changes were announced to annual leave.

They include:

  • Changes to how annual leave can be cashed out;
  • Likely changes to when employers can direct employees to take leave;
  • Likely changes to when annual leave can be granted in advance, and;
  • Provision for annual leave to be paid as part of the employee’s ordinary pay cycle if they are paid by electronic funds transfer.

What’s changing with cashing-out annual leave?

The Commission has agreed to include a general term in modern awards that will let employees cash-out a maximum of two weeks leave per every 12 months.

What’s changing with excessive accrued leave?

Subject to submissions from interested parties the FWC has developed a new model clause that defines an “excessive leave accrual” as 8 weeks for non-shift workers and 10 weeks for shift workers.

If an employer and employee can’t agree on how and when leave will be taken, the clause gives an employer the power to direct an employee to take a period or periods of annual leave.

What’s changing with taking leave in advance?

The FWC accepted a proposed clause drafted by employer groups which would allow for the taking of advance annual leave.

The provision also allows an employer to make a deduction from final pay if the employment relationship is terminated while the employee is on ‘negative leave’.

What’s changing with when leave is paid?

The FWC approved a request by employers for leave to be paid as part of an employee’s ordinary pay cycle. This will save some of the payroll headaches that leave can otherwise cause under these awards.

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