Imminent changes to annual leave provisions

Employers will be able to direct employees to take annual leave

A direction by an employer to take annual leave will be permitted where an employee has accrued 8 weeks’ annual leave (or 10 weeks if the employee is a shift worker with a 5 week annual entitlement). The following conditions apply:

  1. The direction must be in writing and must not result in the employee retaining less than 6 weeks of paid annual leave after the directed annual leave is taken
  2. The minimum period of leave to be taken is one week
  3. The leave cannot commence less than 8 weeks or more than 12 months after the date of the direction

Employees will be able to cash out annual leave under certain circumstances

An employer and an employee can agree to the employee cashing out an amount of accrued annual leave, subject to the following conditions:

  1. The agreement must be in writing, signed by both parties and the employer must keep the agreement in the employee’s HR file
  2. The written agreement must specify the amount of leave to be cashed out, the payment to be made to the employee and the date the payment will be made
  3. Annual leave cannot be cashed out if it results in the employee’s remaining entitlement falling below 4 weeks
  4. Employees can only cash out a maximum of 2 weeks’ accrued annual leave in any 12 month period

 These changes are imminent – we will update you when they become official.