Here’s a summary to help you better manage annual leave and understand how to navigate your way through some annual leave scenarios:
They’re at every workplace. The employee who is always there. Never takes any annual leave. They have more than 8 weeks’ leave and enough leave to share around. We believe that taking time out is needed to keep employees refreshed and engaged. Plus, from an employer’s perspective it can be expensive if you have to pay out a lot of leave if they move onto another workplace. So what can you do in this situation?
Ask your employee to take annual leave
Have a chat to your employee and ask them to take their leave at a mutually agreed time. Annual leave entitlements exist to maintain healthy and productive workplaces. No matter how ‘committed’ your employee thinks they maybe, some time away from the workplace is always a good thing.
Where an employee doesn’t agree to take leave, you must provide at least eight weeks’ written notice of your request for them to take the annual leave. Contact us if you need help with a Direction to take excessive annual leave letter. You cannot direct your employees to take leave up to 12 months in advance.
Show me the MONEYYYYY!
You remember the movie don’t you? Most employees can now ‘cash out’ some of their leave as long as they still have a balance of at least four weeks’ pay remaining and only cash out two weeks of leave in any 12-month period. Cashing out annual leave must be mutually agreed between an employer and the employee. Neither party can force the other party to agree.
It’s a great opportunity for workplaces to review their annual leave policies and procedures and add cashing-out annual leave into their regular leave policy. It’s an extra employee benefit and provides employees with an option if they choose to take it up. Contact us if you need help reviewing or creating your annual leave policies and procedures to incorporate cashing out annual leave.
2. Business shut down periods
Many businesses slow down and even shut down between the December and January period. Employers have the right to enforce mandatory leave periods and need to give two months’ notice to their employees of their intention to shut down over a specific period.
We recommend that shut down periods be included in all employment contracts, so it’s clear from the start when employees begin work with you. In the situation where an employee doesn’t have enough leave to cover them during your shut down period, they will have to take the leave as unpaid.
3. An annual leave request at the busiest time of the year
What can you do when an employee has applied for annual leave at a time when it doesn’t suit the needs of your business? Put simply, you have the right to say no. Particularly when it’s in your peak season and the employee is considered vital for the operation of the business during this peak time. For small businesses it can impact operations if key employees are absent from the workplace at the same time.
It is best to include specific details in your annual leave policy that cover:
- How to apply for annual leave
- How many weeks’ notice employees need to provide
- How leave must be in line with business needs
- Any periods in the year that leave isn’t allowed (and state any specific circumstances that are exclusions to the rule)
4. When to pay
Many modern awards state that annual leave should be paid prior to leave being taken. Employers can now pay annual leave as part of the usual pay cycles rather than a lump sum payment.
Navigating through the rules of annual leave and other HR stuff can sometimes be complex and difficult. If you need HR advice about your employment obligations and practices contact us for a chat.