Taking more leave than your accrued leave entitlement is known as being in negative leave. Negative leave can apply to both annual and personal/carer’s leave. Many employers will allow negative leave under the assumption that the balance will eventually return to zero or be positive. Unfortunately, this is not always the case and the situation can easily get out of hand.
Amending your leave policy is a good way to ensure that the amount of negative leave taken by your employees stays under control. You could, for instance, put a cap on the days of negative leave allowed, up to a limit of say 5 days. Any additional days would need management approval. The Fair Work Act (2009) also allows you to request medical certificates or evidence that the negative leave was taken in the circumstances specified under the personal/carer’s leave provisions. If an employee quits, you can deduct the negative leave from their final pay as long as the employee agrees to the said deduction by signing an agreement (or if their original employment contract contained a clause to this effect).
Conversely, if an employee has accumulated more than 8 weeks’ leave (or 10 weeks for shift workers) you can try to reach an agreement on how to reduce the excessive leave amount. If no agreement can be reached, the following conditions need to apply in order to force an employee to take some of their accumulated leave:
- The direction must be in writing and must not result in the employee having a balance of less than 6 weeks’ paid annual leave after the directed annual leave is taken
- The minimum period of leave to be taken is one week
- The leave cannot commence less than 8 weeks into the future or more than 12 months after the date of the direction
See our previous blog regarding the latest changes to annual leave provisions:
As always, consult your HR expert for specific advice.