25. Annual leave

[Varied by PR751074]

25.1 Annual leave is provided for in the NES. Annual leave does not apply to a casual employee.

25.2 Definition of shiftworker

For the purpose of the additional week of leave provided for in the NES, shiftworker is a 7 day shiftworker who is regularly rostered to work on Sundays and public holidays.

25.3 Payment for annual leave

(a) Before the start of an employee’s annual leave, the employer must pay the employee for the employee’s ordinary hours of work:

(i) at the employee’s ordinary time earnings for the hours the employee would have worked during the period; and

(ii) any annual leave loading payable under clause 25.5.

(b) For the purpose of ascertaining ordinary time earnings in clause 25.3(a)(i), the following are not included:

(i) incentive based payments (other than those coming within clause 18—Payment by results

(ii) bonuses;

(iii) loadings (other than the loading for daily hire and part-time daily hire employees as set out in clause 11.10);

(iv) monetary allowances;

(v) overtime;

(vi) penalty payments (other than ordinary hour penalty rates for employees provided for in this award and only if the employee is regularly rostered to work on weekends);

(vii) shiftwork rates; and

(viii) any other separately identifiable amounts.

(c) In the event of an employee being engaged 4 weeks prior to the commencement of leave, or termination of employment, in 2 or more classifications entitling the employee to different rates of pay, the wages to be paid to the employees will be the average of the weekly rates for the classifications in which the employee was engaged.

NOTE: Where an employee is receiving over-award payments such that the employee’s base rate of pay is higher than the rate specified under this award, the employee is entitled to receive the higher rate while on a period of paid annual leave (see sections 16 and 90 of the Act).

25.4 Electronic funds transfer (EFT) payment of annual leave

Despite anything else in clause 25, an employee paid by electronic funds transfer (EFT) may be paid in accordance with their usual pay cycle while on paid annual leave.

25.5 Annual leave loading

(a) An employee will receive a loading of 17.5% calculated on the employee’s minimum rate of pay set out in clause 16—Minimum rates.

(b) Employees who would have worked shiftwork if they had not been on leave will be paid the greater of:

(i) the relevant shift allowance; or

(ii) the 17.5% loading.

(c) An employee and the employer may agree to defer payment of the annual leave loading in respect of single day absences until at least 5 consecutive annual leave days are taken.

(d) No annual leave loading is due for a period of leave paid out which is less than one year.

25.6 Payment of accrued annual leave on termination of employment

Where an employee leaves or is terminated by the employer during the course of any qualifying 12 month period the employer must pay that employee pro rata wages calculated at the rate of 2.93 hours for each completed week of work. In the case of 7 day shiftworkers, the proportionate payment will be calculated on the basis of 3.66 hours for each completed week of work.

25.7 Annual leave in advance

(a) An employer and employee may agree in writing to the employee taking a period of paid annual leave before the employee has accrued an entitlement to the leave.

(b) An agreement must:

(i) state the amount of leave to be taken in advance and the date on which leave is to commence; and

(ii) be signed by the employer and employee and, if the employee is under 18 years of age, by the employee’s parent or guardian.

NOTE: An example of the type of agreement required by clause 25.7 is set out at Schedule F—Agreement to Take Annual Leave in Advance. There is no requirement to use the form of agreement set out at Schedule F—Agreement to Take Annual Leave in Advance.

(c) The employer must keep a copy of any agreement under clause 25.7 as an employee record.

(d) If, on the termination of the employee’s employment, the employee has not accrued an entitlement to all of a period of paid annual leave already taken in accordance with an agreement under clause 25.7, the employer may deduct from any money due to the employee on termination an amount equal to the amount that was paid to the employee in respect of any part of the period of annual leave taken in advance to which an entitlement has not been accrued.

25.8 Direction to take annual leave during shutdown

[25.8 renamed and substituted by PR751074 ppc 01May23]

(a) Clause 25.8 applies if an employer:

(i) intends to shut down all or part of its operation for a particular period for the purpose of allowing annual leave to all or the bulk of employees in the plant or sections concerned (temporary shutdown period); and

(ii) wishes to require affected employees to take paid annual leave during that period.

(b) The employer must, where possible, give the affected employees, 3 months’ written notice of a temporary shutdown period, or any shorter period agreed between the employer and the majority of relevant employees.

(c) The employer must give written notice of a temporary shutdown period to any employee who is engaged after the notice is given under clause 25.8(b) and who will be affected by that period, as soon as reasonably practicable after the employee is engaged.

(d) The employer may direct the employee to take a period of paid annual leave to which the employee has accrued an entitlement during a temporary shutdown period.

(e) A direction by the employer under clause 25.8(d):

(i) must be in writing; and

(ii) must be reasonable.

(f) The employee must take paid annual leave in accordance with a direction under clause 25.8(d).

(g) In respect of any part of a temporary shutdown period which is not the subject of a direction under clause 25.8(d), an employer and an employee may agree, in writing, for the employee to take leave without pay during that part of the temporary shutdown period.

(h) An employee may take annual leave in advance during a temporary shutdown period in accordance with an agreement under clause 25.7.

(i) In determining the amount of paid annual leave to which an employee has accrued an entitlement, any period of paid annual leave taken in advance by the employee, in accordance with an agreement under clause 25.7, to which an entitlement has not been accrued, is to be taken into account.

(j) Clauses 25.10 to 25.12 do not apply to a period of annual leave that an employee is required to take during a temporary shutdown period in accordance with clause 25.8.

25.9 Cashing out of annual leave

(a) Paid annual leave must not be cashed out except in accordance with an agreement under clause 25.9.

(b) Each cashing out of a particular amount of paid annual leave must be the subject of a separate agreement under clause 25.9.

(c) An employer and an employee may agree in writing to the cashing out of a particular amount of accrued paid annual leave by the employee.

(d) An agreement under clause 25.9 must state:

(i) the amount of leave to be cashed out and the payment to be made to the employee for it; and

(ii) the date on which the payment is to be made.

(e) An agreement under clause 25.9 must be signed by the employer and employee and, if the employee is under 18 years of age, by the employee’s parent or guardian.

(f) The payment must not be less than the amount that would have been payable had the employee taken the leave at the time the payment is made.

(g) An agreement must not result in the employee’s remaining accrued entitlement to paid annual leave being less than 4 weeks.

(h) The maximum amount of accrued paid annual leave that may be cashed out in any period of 12 months is 2 weeks.

(i) The employer must keep a copy of any agreement under clause 25.9 as an employee record.

NOTE 1: Under section 344 of the Act, an employer must not exert undue influence or undue pressure on an employee to make, or not make, an agreement under clause 25.9.

NOTE 2: Under section 345(1) of the Act, a person must not knowingly or recklessly make a false or misleading representation about the workplace rights of another person under clause 25.9.

NOTE 3: An example of the type of agreement required by clause 25.9 is set out at Schedule G—Agreement to Cash Out Annual Leave. There is no requirement to use the form of agreement set out at Schedule G—Agreement to Cash Out Annual Leave.

25.10 Excessive leave accruals: general provision

NOTE: Clauses 25.10 to 25.12 contain provisions, additional to the NES, about the taking of paid annual leave as a way of dealing with the accrual of excessive paid annual leave. See Part 2.2, Division 6 of the Act.

(a) An employee has an excessive leave accrual if the employee has accrued more than 8 weeks’ paid annual leave (or 10 weeks’ paid annual leave for a shiftworker, as defined by clause 25.2.

(b) If an employee has an excessive leave accrual, the employer or the employee may seek to confer with the other and genuinely try to reach agreement on how to reduce or eliminate the excessive leave accrual.

(c) Clause 25.11 sets out how an employer may direct an employee who has an excessive leave accrual to take paid annual leave.

(d) Clause 25.12 sets out how an employee who has an excessive leave accrual may require an employer to grant paid annual leave requested by the employee.

25.11 Excessive leave accruals: direction by employer that leave be taken

(a) If an employer has genuinely tried to reach agreement with an employee under clause 25.10(b) but agreement is not reached (including because the employee refuses to confer), the employer may direct the employee in writing to take one or more periods of paid annual leave.

(b) However, a direction by the employer under clause 25.11(a):

(i) is of no effect if it would result at any time in the employee’s remaining accrued entitlement to paid annual leave being less than 6 weeks when any other paid annual leave arrangements (whether made under clause 25.10, 25.11 or 25.12 or otherwise agreed by the employer and employee) are taken into account; and

(ii) must not require the employee to take any period of paid annual leave of less than one week; and

(iii) must not require the employee to take a period of paid annual leave beginning less than 8 weeks, or more than 12 months, after the direction is given; and

(iv) must not be inconsistent with any leave arrangement agreed by the employer and employee.

(c) The employee must take paid annual leave in accordance with a direction under clause 25.11(a) that is in effect.

(d) An employee to whom a direction has been given under clause 25.11(a) may request to take a period of paid annual leave as if the direction had not been given.

NOTE 1: Paid annual leave arising from a request mentioned in clause 25.11(d) may result in the direction ceasing to have effect. See clause 25.11(b)(i).

NOTE 2: Under section 88(2) of the Act, the employer must not unreasonably refuse to agree to a request by the employee to take paid annual leave.

25.12 Excessive leave accruals: request by employee for leave

(a) If an employee has genuinely tried to reach agreement with an employer under clause 25.10(b) but agreement is not reached (including because the employer refuses to confer), the employee may give a written notice to the employer requesting to take one or more periods of paid annual leave.

(b) However, an employee may only give a notice to the employer under clause 25.12(a) if:

(i) the employee has had an excessive leave accrual for more than 6 months at the time of giving the notice; and

(ii) the employee has not been given a direction under clause 25.11(a) that, when any other paid annual leave arrangements (whether made under clause 25.10, 25.11 or 25.12 or otherwise agreed by the employer and employee) are taken into account, would eliminate the employee’s excessive leave accrual.

(c) A notice given by an employee under clause 25.12(a) must not:

(i) if granted, result in the employee’s remaining accrued entitlement to paid annual leave being at any time less than 6 weeks when any other paid annual leave arrangements (whether made under clause 25.10, 25.11 or 25.12 or otherwise agreed by the employer and employee) are taken into account; or

(ii) provide for the employee to take any period of paid annual leave of less than one week; or

(iii) provide for the employee to take a period of paid annual leave beginning less than 8 weeks, or more than 12 months, after the notice is given; or

(iv) be inconsistent with any leave arrangement agreed by the employer and employee.

(d) An employee is not entitled to request by a notice under clause 25.12(a) more than 4 weeks’ paid annual leave (or 5 weeks’ paid annual leave for a shiftworker, as defined by clause 25.2) in any period of 12 months.

(e) The employer must grant paid annual leave requested by a notice under clause 25.12(a).

An employee’s unused annual leave gets paid out when their employment ends.

The annual leave payment on termination must be the same as the amount that would have been paid if annual leave was taken during employment. This includes annual leave loading if the employee gets it when they take annual leave.

Annual leave loading is paid out on termination even when an award, enterprise agreement or employment contract says that it’s not.