Christmas is just around the corner and is popular time for employees to request annual leave. But what do you do if everyone wants to take time off?

Not everyone can be off over Christmas, and that’s ok. But any leave refusal must be reasonable!

The Fair Work Act says that an employer can only refuse an employee’s request for annual leave if the refusal is reasonable.

Here are some things to consider to determine if your refusal is reasonable:

  • Some employers will make it clear at the beginning of the employment relationship that some periods of the year are not suitable for annual leave. This might include EOFY for payroll staff or during the Christmas period in retail shops.
  • What impact will annual leave have on the operational requirements of the business or department? It may be reasonable to refuse a request if having any more than say three or four employees off at the same time will have a significant impact on the efficiency of a particular team or work group.
  • How much notice has the employee given? An employer could argue that a request for annual leave with a short notice period is unreasonable if it does not allow sufficient time for the manager to organise alternative arrangements within the work group.
  • If an employee hasn’t accrued sufficient leave there is no legal obligation to approve the request. You don’t have to approve unpaid leave for employees wanting a holiday.

Can I direct my employees to take annual leave and, if so, in what circumstances?

An employee can be directed to take annual leave in the following circumstances:

  • during a period of shut down (such as between Christmas and New Year)
  • if the employee has an excessive accumulated annual leave balance

However, the employer’s requirement or direction to take leave must be reasonable. You should consider the following factors:

  • reasonableness of the notice period given (usually 1 month notice)
  • the needs, custom and practice of the business
  • any previously agreed arrangements with an employee

Modern awards and enterprise agreements often provide clauses dealing with directions to take annual leave, which should be consulted when considering a directive of this nature.