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Sorting out annual leave entitlements

Q: We have some employees who have a large amount of accrued annual leave available, and we would like to direct them to take this leave soon. Is there a time frame that we can request they take it by?

A: If the employee is covered by an award or enterprise agreement then you will only able to direct an employee to take leave in accordance with the provisions set out in that industrial instrument.

All modern awards allow an employer to force an employee with excessive leave (more than eight weeks’ paid annual leave), to take that leave. At that point you may try to reach agreement with them on how to reduce the accrued leave.

If you have genuinely tried to reach agreement with an employee but agreement is not reached, you may direct the employee, in writing, to take one or more periods of paid annual leave, as long as:

  • the employee’s remaining accrued entitlement to paid annual leave is not less than six weeks when any other paid leave arrangements are taken into account;
  • you are not requiring the employee to take any period of paid annual leave of less than one week; and
  • you are not requiring the employee to take a period of paid annual leave in the next eight weeks or after more than 12 months.

If the employee isn’t covered by an award or agreement, then an employer can direct an employee to take leave, but only where the requirement is reasonable.

It will generally be reasonable where the employee has accrued an excessive amount of annual leave, for example where they have accrued more than eight weeks.

Whether the direction to take leave is reasonable will also depend on the amount of notice which is given to the employee, as well as the amount of leave which is directed to be taken.

Please note: The answer is correct at the time of publishing. Be aware that laws may change over time. Refer to Annual leave for current advice.

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