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Five Rules Of Annual Leave

Published December 3, 2023 (last updated on April 17, 2024) | Adam Wyatt - Content Writer

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National Employment Standards (NES)

Annual leave is one of the ten National Employment Standards (NES). Every employee, excluding casuals, is entitled to at least four weeks of paid leave each year. Shiftworkers may be entitled to additional leave under the applicable modern award, agreement or the Fair Work Act 2009.

Accrual Of Annual Leave

Despite every permanent employee being entitled to at least four weeks of Annual Leave per year, in most cases the entire balance is not available from the first day. Annual leave will generally accrue progressively throughout the year and will carry over from year to year if unused.

Excess Annual Leave

Where an employee has excessive annual leave an employer may be able to direct an employee to take leave. This will be dependent on the award or agreement which covers the employees which will set out the definition of excessive leave and the process to follow. It should be noted that most awards will state that there will need to be attempts to mutually agree to leave being taken prior to a direction of leave being given.

Annual Leave Loading

Under some Modern Awards, an employee may be entitled to additional leave loading when on annual leave. This is usually 17.5% or their weekend penalty rate or shift rate whichever is higher.. As the loading can vary, it is vital employers check what their relevant modern award or enterprise agreement states, as well as their employment contracts.

Annual Leave And Termination

Upon termination, annual leave must be paid out to employees as if they had taken the leave. This includes any entitlement to annual leave loading outlined in the modern award or enterprise agreement.

For advice on annual leave entitlements specific to their workplace employers should contact Employsure on 1300 651 415.

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