Cashing out of annual leave
The ability to cash out annual leave in accordance with the Modern Award will be subject to conditions and will require the agreement of both the employer and the employee. Any cashing out must not leave the employee with less than four weeks leave and the maximum that may be cashed out in any 12 month period is the equivalent of two weeks annual leave.
Leave in advance
In the event an employee has not yet accrued sufficient paid annual leave to use, the new Modern Award terms will allow an employer and employee to agree in writing for the employee to take annual leave in advance. The arrangement is subject to agreement and the employee cannot demand leave in advance of its accrual, the advance leave must be by agreement.
EFT and paid annual leave
51 of the current Modern Awards oblige an employer to pay an employee their annual leave payment immediately before the commencement of the annual leave. However, this has now been changed to allow the employer to include annual leave payments in the next closest ordinary payment cycle. This ruling only affects payments made by EFT. If staff are paid by cash or cheque, annual leave payments should remain as they were, with payment made prior to commencement of annual leave.
Excessive annual leave
Another change to annual leave, found in 80 of the Modern Awards that will benefit employers is the ability to direct employees who have accrued excessive amounts of annual leave to take a portion of that leave. “Excessive annual leave” accrual will be defined to mean more than eight weeks paid annual leave.
The direction by an employer will be subject to conditions, including that the employer and employee must first attempt to confer and reach agreement on how to reduce the excessive leave. Other conditions on the direction to take annual leave include:
- the direction cannot result in the employee in having less than six weeks paid annual leave;
- the direction cannot require the employee to take a period of annual leave of less than one week; and
- the employee must be given at least eight weeks, but not more than 12 months, notice of the of the time the annual leave must be taken.
It is worth noting that employees will also have the ability to demand to take a period of their excessive annual leave if agreement cannot be reached on when it should be taken and they have had the excessive annual leave accrual for more than six months.