Annual leave in New South Wales is governed by the Fair Work Ombudsman Act and applies to all paid workers (with the exception of casual workers). An employee accrues four (4) weeks of annual leave for each year they work for their employer based upon their ordinary number of hours worked. Therefore, both full-time and part-time employees accrue annual leave. In addition, shift workers may be entitled to five weeks per year of annual leave.  

Annual leave continues to accrue under the following circumstances;

  • While taking paid annual leave
  • While taking paid sick leave
  • Paid caregivers leave
  • Jury Duty
  • Other community duties
  • Long service leave

Annual leave does not continue to accrue under any unpaid leave situations including, but not limited to; unpaid sick leave, unpaid parental leave, unpaid caregivers leave or unpaid annual leave. 

Taking annual leave does require planning on the part of the employee. All employers should be sure to alert their employees as to the rules and procedures for requesting and being granted annual leave. And while it is up to the employer to promulgate these policies, an employer cannot unreasonably deny employees their annual leave.

As an employer you should be sure to have the following policies in place;

  • The amount of advance notice that an employee must give an employer prior to taking annual leave
  • Any restrictions regarding the times of year when employees cannot take annual leave
  • The time frame in which annual leave must be used once it is accumulated
  • Receiving an advance on annual leave
  • How annual leave will be cashed out if an employee leaves their employment

All of these policies should be in writing and contained in the employee handbook. The policies should be carefully reviewed with employees at least annually. To be sure that all employees are aware of their employer’s annual leave policies, it is a good idea to have employees sign off each year attesting to the fact that they have read the employee manual in its entirety, or at least with regard to annual leave responsibilities.

A concern can arise when an employee has saved an abundance of annual leave. Excessive annual leave can be quantified as having accrued in excess of 8 weeks’ annual leave or 10 weeks for shift workers. Under these circumstances some employment agreements may allow the employer to direct the employee to take a mandated period of annual leave.

While annual leave isn’t usually an issue that causes great strife between employees and employers, it is possible for the issue to become quite cantankerous. In Innes v Central Milk Supplies, there was a genuine dispute between an employee and their employer. In this particular case the issue became so heated that the employer fired the employee. The Court held that since the employee had deliberately defied his employer’s policies and ignored the denial of his request to take annual leave, the employer was justified in terminating the employee. 

Hence, it is very important for the smooth running of any business, as well as a matter of respect and professional courtesy, to work with your employer when planning to take a period of annual leave. When employers and employees work together to assure that annual leave is properly requested, then everyone benefits from timely notice being given, approval being extended, and the knowledge that a holiday will go off as planned.

If you find yourself in need of assistance with this, or any other legal issue, please contact the law offices of Owen Hodge Lawyers. At Owen Hodge, we are always happy to assist clients in understanding the full ramifications of any and all of your legal needs. Please feel free to call us at your earliest convenience to schedule a consultation at 1800 770 780.