4 Yearly Modern Award Review – Changes To Annual Leave Provisions

The Fair Work Commission has varied some modern awards with the insertion of new clauses relating to taking annual leave.

The changes came into effect from the first full pay period on or after 29 July 2016. Please note that the below changes do not apply where you have an Enterprise Agreement.

The changes relate to:

  • cashing out annual leave
  • annual leave in advance
  • excessive annual leave
  • EFT and annual leave payments

Cashing out annual leave

Many modern awards now allow employees to cash out annual leave if they:

  • have at least 4 weeks annual leave left after the cash out
  • have signed a written agreement with their employer
  • don’t cash out more than 2 weeks in 12 months

Annual leave in advance

Many awards now allow employees to take annual leave before they have an accrued entitlement to it, if their employer agrees in writing. The agreement needs to:

  • be signed by both the employer and employee
  • state how much leave in advance is to be taken; and
  • state the day the leave will start.

Excessive annual leave

Excessive annual leave is when an employee has accumulated at least 8 weeks of annual leave (10 weeks of annual leave for a shiftworker).

If an employee has excessive annual leave accruals and cannot agree with their employer on when to take the leave, the employer can in writing direct the employee to take annual leave, provided they have given at least 8 weeks’ notice of when the leave will start. The leave has to be for at least 1 week and cannot result in the employee having less than 6 weeks accrued annual leave.

EFT and annual leave payments

Some modern awards provide that an employee is to be paid annual leave before commencing on leave. For those modern awards, a new clause has been inserted which provides that where an employee is paid by EFT, they can continue to be paid using their usual pay cycle during periods of annual leave.

For the list of modern awards that have been varied as a result of this decision, please click on this link 

If you have any questions, please contact Natasha Fletcher of our office on 03 9972 4943.

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