With Christmas around the corner, some employees may want to take annual leave in advance. In this article we look how you can protect yourself when agreeing to let an employee take annual leave in advance.
When can an employee take annual leave in advance?
Under the annual leave in advance clause now included in most awards, an employee can take a period of annual leave in advance if all of the following conditions are met:
the employer and the employee must make a written agreement to the employee taking the period of leave in advance
the written agreement must state the amount of leave to be taken in advance (for example, 7 days) and the date on which the leave will commence and end (for example, 23 December to 3 January)
the written agreement must be signed by both the employer and employee (a parent/guardian if the employee is under 18).
The employer must keep a copy of the written agreement as an employee record.
What happens if the employee leaves and they still have a negative leave balance?
A situation may arise where an employee has taken paid annual leave in advance (in accordance with the award clause) and the employee’s employment ends before the employee has accrued an entitlement to all of that leave paid and taken in advance.
Payroll professional, do not fear! Your award clause allows the employer to make a deduction from money due to the employee when the employment ends.
For example, an employee may have taken two weeks’ annual leave in advance, but only have accrued an entitlement to one week’s annual leave at the time the employment ends. Provided the leave in advance was taken in accordance with a written agreement as described above, the employer could deduct from the money due to the employee, the amount that the employee was paid for one week of the annual leave in advance.
Protect yourself with the Fair Work template!
The Fair Work Commission has developed a template agreement for taking annual leave in advance to assist employers and employees.
There is no requirement to use the Fair Work Commission’s template, but by using this template the employer will meet the requirements under the award for the written agreement. Below is a link to view the template:
https://www.fwc.gov.au/documents/documents/modern_awards/leave-in-advance-agreement.pdf
Finally, don’t forget to double check your awards to make sure your employees can take leave in advance!!