Member Update Modern Award Review Regarding Excessive Annual Leave

The Full Bench of the Fair Work Commission which is currently reviewing the Modern Awards has released its decision on changes regarding annual leave as follows;

EXCESSIVE ANNUAL LEAVE

The Full Bench agreed to introduce a model term in the Awards to make provision to deal with the taking of excessive annual leave. Currently the Awards do not make this provision.

The decision takes into account that ‘greater consistency in the provisions governing the taking of annual leave will make the safety net simpler and easier to understand’, and on that basis formed the provisional view that a model term dealing with excessive leave should be inserted into all modern awards.

The model term will give the employer the right to direct an employee to take their excessive annual leave. The model term will also provide employees with more power when it comes to exercising control over when their leave is to be taken.

As a suggestion an Employer may wish to express this view with a Letter of Offer for new Employees and issue either a memo to existing employees or create a Policy.

Cashing Out Annual Leave

The Decision will resultin a new standard clause relating to cashing out of annual leave, but will be subject to the following four safeguards into the modern awards:

  1. A maximum of two weeks’ paid annual leave can be cashed out in any 12 month period (in the case of part-time employees, this is based on the employee’s weekly ordinary hours)
  2. Specific requirements relating to record keeping and the content of any agreement relating to cashing out accrued annual leave
  3. If the employee is under 18 years of age the agreement to cash out a particular amount of accrued paid annual leave must be signed by the employee’s parent or guardian
  4. Notes are inserted at the end of the model term, which draw attention to the Fair Work Act’s general protections against undue employer influence and misrepresentation

Purchased leave

A Fair Work Commission has indicated that a discussion paper will be published at a later stage to address the issue of purchased leave and has been listed for further hearing before the Full Bench on 28thJuly 28 2015.