Four yearly review of modern awards - Annual leave
The Fair Work Commission (FWC) is in the process of undertaking the first four yearly review of modern awards (commencing in 2014). The review involves an intensive examination of all modern awards, and proposals for adjustment from employers and employees and their associations and unions, as well as a “plain language” project to improve the readability of awards. The review is picking up many issues which could not be dealt with during the award modernisation process in 2009.
Among the issues being addressed by the FWC are several aspects of annual leave:
- Cashing out of annual leave
- Paid leave and electronic funds transfer
- Granting annual leave in advance
- Excessive annual leave.
On 23 May 2016, the FWC released a 104 page decision canvassing the submissions made by all interested parties on previous in-principle decisions, and determined which model clauses would be inserted into which awards.
The model clauses dealing with:
- Cashing out of annual leave will be inserted into 112 awards
- Paid annual leave will be inserted into 51 awards
- Leave in advance will be inserted into 113 modern awards
- Excessive annual leave will be inserted into 80 modern awards.
The model clauses:
- Allow annual leave to be cashed out rather than taken, within fairly strict parameters (for example, a maximum of two weeks per year)
- Allow employers to use EFT to pay wages while annual leave is being taken (rather than having to pay it prior to the leave being taken, which was the previous provision in some awards)
- Facilitate an employee taking leave in advance of it being accrued, and consequential adjustments to future entitlements
- Allow an employer to direct an employee to take leave if their accrued leave balance is excessive (more than six weeks) so long as the employer gives the employee four weeks’ notice to take the leave, and the employee retains at least four weeks leave after the direction given by the employer.
When the changes will take effect has yet to be determined, but we will provide information about this to our clients as the review process comes to a conclusion.
If you’re unsure of whether you are affected by the changes, or would like to know more about the changes, contact our Employment Law team:
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