By a decision handed down on 3 August 2016, the Fair Work Commission has given millions of employees nation-wide the option of cashing out their annual leave rather than being required to take time out from work for holidays.
Whilst already possible for employees subject to enterprise agreements and employees who have been award/agreement free under the Fair Work Act (Cth) since 2009, this option has just been extended to nearly all employees covered by industrial awards.
Nearly all of the 122 workplace awards that apply throughout Australia will now permit employees to cash out annual leave if they:
- retain four weeks annual leave after the cash out; and
- sign a written agreement with the employer agreeing to the cash out including the amount that the employee will be paid and the date of payment. A new agreement must be entered into each time a request for cashing out annual leave is made.
There is also a limit on this option with employees only able to cash out up to two weeks annual leave in each twelve month period.
If you are an employer, you must keep a copy of every cash out agreement made with the employee. Also, employers are not permitted to force or pressure employees to cash out their annual leave.
Whether cashing out annual leave is an option in your workplace will depend on the specific award that applies to your business or employment. The awards and the cashing out provisions can be checked on the Fair Work Ombudsman website on https://www.fairwork.gov.au.
At the same time, employers have also been given greater powers to force employees with excessive amounts of accrued annual leave to reduce these balances. Employees with eight or more weeks accrued annual leave may be directed to take annual leave by their employer.
Please call our employment lawyers at Hendersons Legal on 03 9629 2211 to discuss cashing out annual leave or any other employment issues arising in your business or workplace.
This content is intended as commentary and should not be construed as legal advice.
For more information call Melissa Henderson on 03 9629 2211.
