All work and no play is bad for business, according to the Fair Work Commission, which yesterday agreed to an application from business lobby groups to give them the power to force employees to take excessive leave or pay out up to two weeks leave annually.
The crucial ruling by the full bench means that once an award worker has accrued more than seven weeks of leave, an employer can direct them to take a break, provided they’re given eight weeks notice. The two parties are expected to sit down and negotiate on a leave plan.
Workers are able to retain up to six weeks of leave and can’t be made to take less than a week off.
The decision is expected to apply to nearly 2 million award workers.
The four critical aspects of the FWC ruling are:
- an employer being able to direct an employee to take paid annual leave in circumstances where the employee holds an excessive balance of accrued annual leave;
- an employee who is paid by means of EFT being able to be paid in accordance with their usual pay cycle while on paid annual leave rather than prior to commencement;
- an employer being able to grant an employee leave in advance;
- an employee being able to cash out a portion of their annual leave (provided their employer agrees) subject to a number of safeguards, including a residual balance of no less than four weeks annual leave.
The Australian Industry Group, which brought the case, said the decision was good news for all.
Chief executive Innes Willox said the issue had been a “major headache” for business.
“The decision will provide welcome relief to employers and will give employees more incentive to take their annual leave,” he said. “The decision provides important new rights for employers and important flexibilities for employers and employees.
“When awards are varied to reflect the Full Bench’s decision, award-covered employees will be able to cash out any accrued annual leave in excess of four weeks accrued leave, by agreement with their employer and subject to various safeguards.”
The Australian Chamber of Commerce and Industry’s Richard Clancy described them as “sensible changes”, but added “there is still a lack of flexibility in the modern award system that needs to be addressed.”
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