Results 1 to 4 of 4
  1. #1
    Join Date
    Aug 2012
    Location
    Singapore
    Posts
    4

    Default Carry Forward of Annual Leave

    The statutory annual leave entitlement is 20 days.

    From Fairwork
    'An employee’s entitlement to annual leave under the NES accrues progressively during a year of service according to their ordinary hours of work and accumulates from year to year. '

    However, i understand that we could : (from labour law):

    (5) An employer may require an award/agreement free employee to take a period of paid annual leave, but only if the requirement is reasonable.
    Note: A requirement to take paid annual leave may be reasonable if, for example:
    (a) the employee has accrued an excessive amount of paid annual leave; or
    (b) the employer’s enterprise is being shut down for a period (for example, between Christmas and New Year).
    Agreements about taking paid annual leave
    (6) An employer and an award/agreement free employee may agree on when and how paid annual leave may be taken by the employee.
    Note: Matters that could be agreed include, for example, the following:
    (a) that paid annual leave may be taken in advance of accrual;
    (b) that paid annual leave must be taken within a fixed period of time after it is accrued;
    (c) the form of application for paid annual leave;
    (d) that a specified period of notice must be given before taking paid annual leave.


    Question 1: can we state in employment contract that leave must cleared by 31 Dec each year?

    Question 2: what is the definition of 'excessive leave' in the labour law document?

    Question 3: apart from the leave encash, what is the general practice, we allow for indefinite carry over of annual leave year on year?

    thanks!
    Carolynn

  2. #2
    Join Date
    May 2010
    Location
    Melbourne
    Posts
    151

    Default

    Quote Originally Posted by carolynn View Post
    Question 1: can we state in employment contract that leave must cleared by 31 Dec each year? You can state it, doubt it would stand up to any real test if push came to shove though, if you stated all leave accrued up until 30 Sept must be taken by 31 Dec you might have a chance assuming the employee is award or EBA free. Keep in mind this will lead to problems as everyone will leave their leave to the last minute and unless you have a 'christmas shutdown' it could lead to operational issues. Also include what the consquence is - you can't just confiscate the leave so think about that side of the statement as well or it will be treated as the hollow threat it is

    Question 2: what is the definition of 'excessive leave' in the labour law document? I don't believe in general employment law this is defined. Most companies generally operate on 8 weeks before enforcing leave to be taken from my experience and require the employee to have it reduced to under 6 weeks

    Question 3: apart from the leave encash, what is the general practice, we allow for indefinite carry over of annual leave year on year? Most companies keep an eye on it from a set amount (ie anyone above 8 weeks), with a view also for audit purposes to ensure certain employees take a minimum of 2 weeks in one go each year to ensure others have a chance to do their job. I'm noticing that quite a few companies seem to be cracking down on leave balances in the current economic environment though

    thanks!
    Carolynn
    replies as per above

  3. #3
    Join Date
    Apr 2012
    Posts
    196

    Default

    Accumulation of annual leave due to people not taking it is a universal problem in most organizations I've had contact with.
    Companies simply either a) don't have robust policies on this &/or fail to manage their annual by ensuring their managers have annual leave plans. It doesn't take a lot of effort to manage this but it is just not given any value so is ignored.
    The only people who see the huge liabilities on the books for leave are the senior people and they don't seem to get it either or there is just a disconnect between Finance & HR.

    First and foremost, you have got to have a Policy and it needs to have detailed procedures associated with it, ones that cover every aspect of keeping your liabilities manageable - remember the longer between accrual and the taking of A/L, the higher cost to your company because you are paying it out at a higher rate (because salaries will have increased over time).

    Secondly, you have to make it a KPI for all people Managers that they have an annual leave plan in place for their dept and that they manage it. A good result is that all in the dept take their leave each year. That can be a challenge in times of lean workforces which often contribute to people not taking their leave "too busy".."no one to do my job whilst I'm away"... "coming back to a huge workload which has built up so not worth taking leave" are common refrains. But they are also very real. If organizations are not prepared to get in temporary help, then truly, what is the point in taking leave?
    Another factor is the lack of job security these days, you can be here today, gone tomorrow, so some save up A/L to get it paid out at termination as a little insurance, much the way many do for Long Service Leave.

    Christmas shutdowns are becoming more common. Previously the domain of just manufacturing and blue collar organizations, the trend is now encompassing more white collar organizations. A Xmas Shut should always be flagged at interview stage of new staff and should get a mention in your annual leave clause of your employment contract. Many late in the year starters may not have sufficient leave accrued to cover the shut so your policy needs to address that
    a) pay them and let them go into leave debt? (in which case you must have them sign to this and include sentence that should they leave before the leave is accrued, they authorize you to deduct any outstanding amount from their final pay).
    b) have them take it as leave without pay.

    Many, in particular, financial institutions eg, have policies whereby there is a requirement to take at least one two-week chunk of leave each year (then fulfils internal audit requirements); others may restict single days of A/L to say 5 per year. Something to think about in context of your own company.

    Excessive A/L would, as a minimum be viewed as anything of 30 days or higher. If someone has 30 days, it suggests they've not had a holiday in 18 months. Some common sense needs to apply where people often save up a couple of years A/L to take a nice long overseas holiday. 40 days or higher is definitely excessive and you can request your people to take it provided you give them plenty of advance notice you want the leave reduced and by how much. Give them time to plan something but if that doesn't happen, then tell them they are on A/L from ??date. Some may call your bluff and do nothing so you need to make it clear that your policy will be enforced and you don't exceptions or you will have problems.

    If your organization has an EA, then get what you want around this included in your next negotiations. Most unions would be happy to see their members have work-life balance and taking their leave.

    Changing your culture so that Managers managing the leave of their staff effectively will the hardest part in all this. You will need to conduct training on how to do it, what outcomes you want and how this will be part of their own performance review measurement. It is not that hard - start with a leave planner - excel spreadsheet or wall planner - something that all in your dept have easy access to. Set some guidelines around first in-best dressed but you might also need to rotate, annually, those high leave periods like Easter, school holidays etc - you can't have everyone out at the same time but in fairness, all should have the option to take leave at those peak holiday times. It might be there is an offset for those who have kids to take leave in school holiday periods and those without, having first shot at other peak times. Departmental discussions around this and after a while a routine will set in. Leave plans should be complete by mid-February each year (as a suggestion) and employees will eventually get used to planning ahead their main periods of A/L.

    Remember however, that Managers too have to take their A/L so this process has to be endorsed from the top.

    As to inclusion of 'leave to be taken each year" in your employment contracts, I agree, it's not likely to hold a lot of weight. More critical to have within that contract, a clause relating to adherance to all policies in general and fact that they may change from time to time.

    As to cashing out of A/L, it is an easy way to reduce your leave liability and still leaves the employee with leave to take (minimum of 4 weeks must be retained after cash out) so can be a win-win for employee and employer.

    At the end of the day, the onus is on the employer to manage all employment obligations and this is just one of those.

  4. #4

    Default

    1. No you cannot state that employees annual leave must be cleared by December 31 each year because this would not be reasonable. (refer to end*)

    2. Generally accrued leave over 8 weeks can be classed as excessive. This is the common number of weeks in modern awards.

    3. Annual leave accrues indefinitely unless managed by managers, who are generally the ones with the most accrued leave.


    *An employer can direct employees to take annual leave is 'reasonable'. A direction can be Reasonable if:
    1. the employee has excessive leave
    2. Business requirements - eg Christmas shutdown period. Not many other periods are recognised in Australia as yet.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
APS4 - APS6 Recruitment Advisors - Canberra CBD
Posted on 28 Mar 2024 at 12:54pm

P&C Advisor - Melbourne
Posted on 28 Mar 2024 at 4:30am

HR Business Partner - ER - Hills District
Posted on 28 Mar 2024 at 2:22am

VPS5 Senior People Partner - Melbourne
Posted on 27 Mar 2024 at 11:21pm

VPS5 Senior TA Partner - Contract - Melbourne
Posted on 27 Mar 2024 at 11:20pm

RD Writer - Contract - Sydney
Posted on 27 Mar 2024 at 11:20pm

VPS4 HR Business Partner - Contract - Melbourne
Posted on 27 Mar 2024 at 11:16pm

Rostering Officer - Contract - Baulkham Hills
Posted on 27 Mar 2024 at 2:52pm

Workplace Relations Advisor - North Sydney
Posted on 27 Mar 2024 at 4:05am

A06 HR Business Partner - Contract - Brisbane
Posted on 26 Mar 2024 at 11:05am

HR Advisor - Perth
Posted on 26 Mar 2024 at 1:50pm

Employee Relations Manager - Sydney
Posted on 26 Mar 2024 at 1:56am

HR Business Partner - Contract - Perth
Posted on 25 Mar 2024 at 8:31am

HR Manager (Part-Time) - Permanent - Footscray
Posted on 25 Mar 2024 at 8:29am

HR Advisor - Sunshine Coast
Posted on 24 Mar 2024 at 9:48pm


 

Powered by vBadvanced CMPS v4.2.1