Published 22 June 2020 | Updated 8 April 2021
All employees (other than casuals) are entitled to paid annual leave. Temporary changes have been made to some annual leave entitlements because of the impact of coronavirus.
Most changes affect employers and their employees covered by an affected award or a varied enterprise agreement.
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Temporary changes to annual leave entitlements
A number of awards have been varied by the Fair Work Commission (the Commission) to increase award flexibility and help manage the impact of coronavirus.
For a list of all awards which have been temporarily varied due to coronavirus see Changes to workplace laws during coronavirus.
Annual leave at half pay in some awards
The Commission has varied many awards to allow employees to take annual leave at half pay to manage the impact of coronavirus. A temporary new schedule inserted into these awards lets employees take twice as much annual leave at half their normal pay if their employer agrees.
This means an employee gets 1 week of annual leave pay (including annual leave loading if it applies) for every 2 weeks of annual leave they take.
The employer and employee need to agree for an employee to take leave at half pay. The agreement needs to be in writing and the employer needs to keep it as a record.
For most awards that have been varied, the leave needs to start before 30 September 2020, but can finish after that date.
An employee on leave at half pay accumulates annual leave and sick and carer’s leave as if they were on leave at full pay.
Check if your award has been varied at our list of affected awards.
Enterprise agreement variations
Some parties to enterprise agreements may be considering varying their agreements. This is to give extra flexibility in the workplace and help address the impact of coronavirus, and may impact annual leave under some agreements. Making and varying enterprise agreements is managed by the Fair Work Commission.
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Annual leave entitlements that haven’t changed
Accumulating annual leave
Employees keep accumulating annual leave as usual, if they:
- have been stood down
- have requested or been directed to take annual leave
- are on a type of unpaid leave that counts towards annual leave accrual, such as unpaid pandemic leave, or
- are on annual leave at half pay.
Annual leave loading
Some awards or agreements require that annual leave loading is also paid for annual leave. Award variations haven’t changed annual leave loading entitlements. If an employee normally receives annual leave loading, this still needs to be paid.
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Directing an employee to take annual leave
Directing an employee to take annual leave – awards and agreements
The rules about when and if an employer can direct an employee to take annual leave are set out in awards and enterprise agreements.
Under an award or enterprise agreement, an employer may be able to direct an employee to take annual leave in certain circumstances, for example if the business temporarily closes because of the impacts of coronavirus.
See the examples below which explain how this can work in practice in various situations.
Example: Direction to take annual leave during a shut down - award allows for it
Pablo is a part-time salesperson at a small advertising business, run by Ads-R-Us Pty Ltd, based in Fremantle. He’s covered by the Commercial Sales Award. Pablo has 7 days of accrued annual leave.
Due to coronavirus, Ads-R-Us has temporarily closed. Pablo’s manager told him the day before the shut down that he’s required to take his annual leave while the business is closed.
Pablo’s award says that the business needs to give him at least 4 weeks’ notice before directing him to take annual leave while the business is shut down.
This means that the business can only direct Pablo to take annual leave starting from 4 week into the planned shut down. For the first 4 weeks of the shut down, the business has to pay Pablo his normal wages.
Example: Direction to take annual leave during a shut down - award doesn’t allow for it
Andrea is a part-time maintenance employee at a museum. She’s covered by the Amusements, Events and Recreation Award. She has 14 days of accrued annual leave. Due to coronavirus, the museum has temporarily closed to the public.
Employees can’t be directed to take annual leave during a shut down under the Amusements, Events and Recreation Award. An employer and employee need to agree for an employee to use annual leave.
Andrea and her employer discuss her options. Andrea’s employer explains that the shut down period would be a good time for Andrea to take leave while there is less work to do. Andrea is happy to take 1 week of leave but wants to keep some leave for a family holiday she has planned later in the year.
Andrea and her employer agree that Andrea will take 5 days of her annual leave during this shut down period.
Example: Direction to take annual leave - excessive leave balance
Grace is a part-time employee in a clothes shop in Brisbane’s CBD. Grace is covered by the Retail Award. The store continues to operate but it’s not as busy because of coronavirus. There isn’t enough work for all employees.
Grace has 9 weeks of annual leave accrued. Grace’s manager has asked her to consider taking some leave, but they haven’t been able to agree about when.
The Retail Award says that employers can direct employees to take annual leave if they have more than 8 weeks accrued and they can’t agree about when to take the leave. To do this, Grace’s manager has to tell her in writing and give her at least 8 weeks’ notice that she needs to take leave. This means the business can’t direct Grace to take her excess annual leave immediately – the start date has to be at least 8 weeks away. Grace’s manager sends her a letter that directs her to take 2 weeks of annual leave starting in 8 weeks’ time.
Example: Direction to take annual leave - business has slowed down
Juan is a full-time hairdresser at a hair salon in Wollongong and has 4 weeks of annual leave. He’s covered by the Hair and Beauty Award. Due to coronavirus, there are fewer customers and the salon doesn’t need as many hairdressers to work at the same time. The salon wants to stay open but wants to direct Juan to take some annual leave.
Juan’s award only allows the salon to direct him to take annual leave if he has more than 8 weeks of annual leave, or during a close down of its operations.
As neither of these situations apply, the salon can’t direct Juan to take annual leave. Juan and the salon will need to work together to find the most beneficial solution to suit both Juan and the salon’s circumstances.
Award and agreement free employees
Employees that aren’t covered by either an award or an agreement may be directed to take annual leave as long as the direction is reasonable. This includes if the employer is shutting down its business because of the impact of the coronavirus. See Award and agreement free wages and conditions.
If you’re covered by an enterprise agreement, you need to check it for any extra rules about directions to take annual leave.
Parties to some enterprise agreements have applied to the Fair Work Commission to vary their agreements. This is to give extra flexibility during coronavirus and may impact annual leave under those agreements.
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Cancelling annual leave
Employers or employees might want to cancel approved annual leave as a result of the impacts of coronavirus. For example, an employee’s planned holiday could be cancelled because of travel restrictions.
For employers, their business may be busier than ever and they might want to cancel employees’ approved annual leave to make sure they have enough staff available.
An employer or an employee can cancel approved annual leave if the cancellation isn’t unreasonable.
Awards, enterprise agreements, employment contracts and workplace policies may have extra rules about cancelling approved annual leave, so make sure you check what applies to you.
Employees cancelling annual leave
If an employee asks to cancel their approved annual leave, an employer shouldn't unreasonably refuse the request.
Example: Cancelling an annual leave request
Caitlin is a full-time administrative assistant at a small accounting firm. In late 2019, Caitlin’s employer approved her request to take 4 weeks of annual leave in July 2020 to travel to Europe.
Because of the impacts of coronavirus, Catilin can’t travel overseas and her trip has been cancelled. In early May 2020, Caitlin asks her employer if she can cancel her annual leave approved for July. The employer considers Caitlin’s request and approves it because it’s a reasonable request. Caitlin has given plenty of notice and has plans to use her accumulated annual leave to go to Europe later.
Caitlin’s employer emails her to confirm the cancellation of leave.
Employers cancelling annual leave
When deciding to cancel an employee’s approved annual leave because of the impacts of coronavirus, employers should also consider:
- whether any costs have been incurred (for example, if the employee has paid a deposit for activities during their leave)
- how much notice of the cancellation is given.
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