Do you really understand employee leave entitlements and how you can best manage them?

An employee, whether permanent or casual, is entitled to a range of leave benefits. This could be paid or unpaid leave. Your employees will typically know what they are entitled to but you will need to keep your finger on the pulse and guide them as to how they can access these entitlements. 

Here is a quick snapshot of the different types of leave an employee is entitled to. If after reading this you feel like you need more information, visit https://www.fairwork.gov.au/leave where each type of leave is addressed in more detail.

annual leave

Full-time and Part-time employees are entitled to 4 weeks of annual leave based on their ordinary hours of work. A part-time employee who works 30 hours a week, will accumulate 4 weeks equivalent of their 30-hour week. If you have shift workers as part of your workforce, they may be entitled to more leave benefits. Please refer to your award if this is the case.

Annual leave is accumulated from the day an employee starts with you. An employee accumulates leave while they are on paid leave of any kind (including carers leave and long service leave) There are circumstances of unpaid leave where paid leave does not accrue (for example – paid parental leave scheme)

How an employee applies for and takes their leave is dependent on the business needs. Businesses are encouraged to have a leave process and policy in place to be able to ensure their needs are still met even if employees are on leave.

An employee should be provided leave details by their employers – how much leave they can take at any one time and if there are certain times they are not able to take leave based on the way your business operates. If you work with a modern award or you have a registered agreement, these documents may set out the process. For others, a simple policy or employment agreement can provide guidance and process. Each business is different so the process will vary depending on your circumstances and the type of business you have.

An example – Your business may have a shutdown period over Christmas/New Year. Employees need to understand this, know about their accruals and your policy about negative leave or unpaid leave in relation to this period. This can all go into a policy.

A final note on annual leave, any accrued and not used during employment is paid out on termination of employment regardless as to why the employment came to an end.

sick + carer’s leave

This leave allows an employee to take leave if they are suffering from personal illness, or caring for an immediate family member or household member who is suffering from an illness. Sick leave can also be used when there is an emergency with the employee or their family.

Employees are entitled to 10 days of sick/carer’s leave during a 12 month period. An immediate family member or household member is a; Spouse/partner, de facto, child, parent, grandparent, grandchild, siblings or anyone living with the employee.

family + domestic violence leave

All employees are entitled to a minimum of 5 days of unpaid leave each year to manage family & domestic violence matters as laid out in the National Employment Standards.

It is important as an employer that you understand this entitlement and allow your employees to access leave should they need to deal with or act on a family and domestic violence situation.

As a business, you may also offer paid leave, just ensure that you lay this out in a policy or a contract so that your employees understand their entitlements over and above the 5 days unpaid leave.

Family and domestic violence refers to violent, threatening or abusive behaviour by someone close to the employee who seeks to coerce or control them or cause them harm or fear. 

You may also wish to have information in relation to support services available to your employees if needed.

The Fair Work website provides a number of resources in relation to this including a checklist to help you support the employee.

compassionate + bereavement leave

All employees including casuals are entitled to this leave. Compassionate or bereavement leave can be taken when a member of an employee’s immediate family or household member dies or develops or contracts a life-threatening illness or injury.

All permanent employees are entitled to 2 days paid leave each time this occurs. This leave can be taken in a single continuous period or over two separate days. Again, you as the employer can provide additional entitlements or access to additional leave.

Compassionate leave does not accumulate or get paid out on termination. It also does not come out of sick leave benefits. It is a separate leave and can be applied at the time of the above definition.

If an employee is on annual leave or sick leave at the time, they can use compassionate leave instead of other leave benefits.

It is important that your employees understand the process and definition of compassionate leave and know to notify you as soon as they can, along with the period of leave they expect to take. You as the employer may grant compassionate leave for non-immediate family members or non-household members, on agreement. You can also request evidence around the reason for compassionate leave, however, this evidence must be reasonable. An award or registered agreement may detail terms around evidence that you can use as a guide. 

maternity + parental leave

Permanent employees are entitled to 12 months of unpaid parental leave. They can also request an additional 12 months of leave. The entitlement kicks in once an employee has been with your business for 12 months before the leave starts and have or will have responsibility for the care of the child.

Casuals can also be entitled to unpaid parental leave if they have been working regularly with your business for at least 12 months and they planned to continue to work with your business, regularly if it had not been for the birth or adoption of a child.

As an employer, it is important that you understand the process around parental leave and that you have good practices in place to ensure that you do not discriminate or disadvantage an employee. Having a process to prepare for the leave including providing information to your employees about the Paid Parental leave scheme and how you administer Dad and partner pay, returning to work processes, flexible working arrangements are just some of the considerations. The Fair Work website has a great guide that you can download here: https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/best-practice-guides/parental-leave

Additionally, if you have an employee couple, they are entitled to take leave at the same time for a maximum of 8 weeks within the first 12 months of birth or adoption.

public holidays

Good practice is to know your public holidays (in each state) so that you can ensure you action the relevant entitlements or wages for these days. An employee is entitled to public holidays depending on where they are based not where they may be working on the day of the public holiday.

Employees have the right to be absent from work on a public holiday. Employees are paid their base rate on public holidays. If a part-time worker doesn’t work that day, they are not paid for the public holiday. Make sure you refer to your award or agreement about the rules around working and not working on public holidays.

Visit the Fair Work website to find more scenarios around public holidays (e.g. How to manage when combined with sick leave, unpaid leave etc)

community service leave

Employees are entitled to take leave for activities such as voluntary emergency management (i.e. SES for example) and jury duty. 

To learn more about Jury Duty obligations as an employer please click here https://www.fairwork.gov.au/leave/community-service-leave/jury-duty. As an employer, you will be obligated to pay some of your employees’ salary while they are on jury duty.

With the exception of Jury Duty, community service leave is unpaid and the employee is entitled to take leave for as long as they are engaged in the activity. It is important that the employee provides you with notice and expected absence, as soon as possible. You can also request evidence from the employee to confirm that they are entitled to community service leave.

Consider including an onboarding question with your employees to understand if they do belong to a recognised emergency management body like the SES or Defence reservist.

Please note that Defence Reservists have additional workplace protections under the Defence Reserve Service (Protection) Act 2001. You can read more about their rights and responsibilities at work here. https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/rights-and-obligations/defence-reservists-rights-and-responsibilities-at-work

long service leave

Employees become entitled to this kind of leave after a long period of working for their employer, typically 10 years, yet entitlements can kick in from 7 years in some circumstances.

 If you have or are getting to the point where you may need to administer these entitlements, it is important that you know your obligations and how it is different in each state or territory of Australia.

Note also that there are different rules if your business is part of a pre-modern award (before January 1, 2010) so you will need to know your dates around this to make sure you apply the correct rules. You can find information about the federal pre-modern awards by searching the Fair Work Commissions database here https://www.fwc.gov.au/search/document/award or calling them at 13 13 94.

However before you call the commission, you will need to be ready with some business and employee information. You can find a checklist here: https://www.fairwork.gov.au/contact-us/call-us/before-you-call. Alternatively, you can chat with an Industrial Relations specialist and we can provide a number of specialists to call. If you would like help preparing processes, reviewing your employment contracts or getting help around having the right discussions with your employees, contact us.

Wrapping it up

Unpaid leave is available to all employees whether permanent or casual in a variety of circumstances. If your business is structured in a way that can enable employees to take their leave benefits when they need it, it automatically improves engagement and culture. Regular breaks from work are a great way to recharge and are also good for an employee’s mental health. Think about how creative you can get with your leave policies that not only meet your obligations as an employer but can also create a positive impact on your team and the culture of your business.