Not all employers can direct employees to take annual leave during lockdown

Published July 19, 2021 Author: Employsure
Forced Annual Leave

Business owners feeling the financial stress associated with lockdowns in Australia can direct their staff to take annual leave, but only in specific circumstances.

With roughly 12 million Australians currently under strict lockdown restrictions, a number of employers have been forced to temporarily shut their doors. This has ultimately led to confusion surrounding annual leave and if it is possible for employers to direct staff to take it.

“As it stands, an employer can only direct their staff to take annual leave during a shut down if their award or registered agreement allows it,” said Nicholas Hackenberg, employment relations specialist at Employsure, workplace relations advisor to 30,000 SMEs across Australia and New Zealand.

“Some awards allow for it, but require the employer to give several weeks’ notice. In those first few weeks, the employer must pay their employee their normal wage. Other awards may not allow employers to force annual leave on staff, however it can come into effect if a mutual agreement has been reached between them.

“Employers confused as to what their obligations are should double check to see if their award or registered agreement allows them to direct employees to take annual leave. This also includes those not covered by either. The general rule is an employer can only direct staff to take annual leave if that direction is considered to be reasonable.”

Requesting staff take annual leave is an alternative option to a stand down as it allows employees to still receive pay, and enables businesses to reduce leave balances. During JobKeeper, employers were given extra powers (enabling directions) which allowed them to run entitlements down while they were receiving the subsidy. Employers should note however that this is not the case with the current disaster payments.

Employees covered under some awards are still also entitled to an extension in annual leave flexibility. Until the 31st of December, employers can agree for staff to take their annual leave at half pay and double their time off work. In other words, the employee gets paid one week of their annual leave entitlement over a fortnight.

Employers worried about employees accruing excessive amounts of leave should encourage staff to take the leave at half pay, and also remind them of their unpaid pandemic leave entitlements. This can be of benefit for the employer for three reasons.

First and foremost is the financial cost associated with too much leave. If employees are allowed to accrue leave while also getting paid their normal wage, it can lead to higher costs for the employer once that leave is ultimately paid out. It becomes cheaper for the employer in the long run if an employee can take leave during a lockdown

The second reason is employee burnout. Many employees may not have taken a holiday since the pandemic began, and as such should be urged to take at least a few days off to rejuvenate themselves mentally. Finally, employers who don’t require staff to take leave may see an increase in leave requests once international borders re-open.

“Encouraging mini-breaks will help avoid a bottleneck of future leave requests and will result in less stress for the employer,” continued Mr Hackenberg.

“No one likes these lockdowns and the financial stress that comes with them. Employers must be proactive and do what is best for themselves and the company. If there is still confusion, they can call Employsure on 1300 207 182.”

Further enquiries:

Matthew Bridges

[email protected]

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