Australia’s Annual Leave: Bad HR or Bad PR?

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Find out if employees are saving up, being directed to take leave or chucking sickies to get time off

Summer means the return of the natural tan and unbridled shopping and feasting as retail and restaurant businesses welcome the busiest season of the year Down Under. Unfortunately, the same cannot be said for most industries.

Recent years have seen reports of the unsavoury practice in which employers direct their employees to clear their annual leave during the slow months, and sometimes more than half of their annual entitlement.

How true or frequent is this practice? Is it legal? Where do the employees’ rights begin and the employers’ end? To get to the bottom of these questions, TSheets commissioned Pollfish to survey 500 Australian workers, where the sample was an even mix of managers and non-managers for a balanced perspective of leave in 2016, and the findings reveal plenty of good oil.*

 

 

The end of the ‘Great Aussie Sickie’

In a 2015 survey, it was found absenteeism levels among Australian workers have dropped to a seven-year low of 8.6 days a year for each worker. And while employers may argue the ‘sickie culture’ is still strong at the workplace, our survey showed (most) employees are utilising sick leave for the right reason.

But we also wanted to know the top reasons for chucking a sickie among our respondents. Some of their answers included:

  1. To see family
  2. To take a long weekend
  3. To see friends
  4. To recover from a hangover
  5. To save up annual leave
  6. To go for a job interview
  7. To enjoy the nice weather
  8. To enjoy a day at the beach
  9. To attend a sporting event
  10. To work for someone else

Employers are entitled to request for evidence to support an employee’s absence on sick leave. An employee who doesn’t submit the requested evidence when asked may not be entitled to paid leave.

But if you thought the Fair Work Commission isn’t paying close attention, you’d be mistaken.

In September 2017, the FWC stepped in to help Avril Chapman get $8,000 in compensation for being ‘harshly’ sacked after chucking a birthday-hangover sickie. Deputy President David Barclay concluded the termination was harsh, inappropriate and could’ve been resolved with a “less severe sanction”.

 

1 in 3 employees get less than the required annual leave

Australia’s standard annual leave entitlement is four weeks, and it accumulates from the first day of employment, with unused leave rolled over from year to year. This entitlement is a requirement under the National Employment Standards (NES), and whilst businesses may be governed by specific Modern Award (MA) or Enterprise Agreement (EA), the number of days cannot be less than what is required under NES.

Our poll showed half of the respondents received at least 16 days of annual leave in 2016. The numbers, however, began to dwindle, as some 30% got a lot less than the required NES minimum.

 

 

The survey also found 14% had no annual leave. The only employees who do not get annual leave are casual employees, and the latest ABS data shows 22.6% of the Australian workforce are casual — up from 20.1% in 2015.

But even accounting for casual employees in the workforce, the data suggests a significant number of employers could be flouting the law, with around 1 in 3 employees getting less than the minimum required by the NES.

 

Employees with leftover leave: hoarders or hard workers?

At first glance, those in a managerial role were more likely to use up their annual leave, suggesting that their rank allowed them more control over their work schedule when compared to non-managers.

Of respondents who had leave leftover:

  • 52% had 1-5 days left
  • 9% had 16-20 days left
  • 7% had more than 31 days left
  • 3% had 21-25 days left
  • 3% had 26-30 days left

 

Can employers “force” employees to take leave?

According to Fair Work, an employer can direct an employee to take leave in two instances: when they have accrued excess days or during a shutdown. Bear in mind this requirement can be superseded by a modern award and enterprise agreement.

Excessive annual leave balance is defined as having up eight weeks of annual leave, or 10 weeks if the employee is a shift worker. Using our poll sample, where no respondents had eight weeks of annual leave left, employers would therefore not be justified in directing employees to take leave, unless the organisation was closed for business during the specified duration.

Yet, 63% of respondents have been forced to take at least one or more days off. Earlier data had suggested rank granted those in managerial role more control over their schedule. This turned to be untrue, as 71% of managers were forced to take leave.

Of employees who took “forced leave”:

  • 26% were asked to take 1-5 days off
  • 14% were asked to take 6-10 days off
  • 11% were asked to take 11-15 days off
  • 12% were asked to take 16 days or more off

 

Is cashing out leave an option?

Cashing out is only allowed under specific awards or agreements and varies by industry. It is important to note certain rules must be enforced in allowing this.

  • The employee must still have at least four weeks after cashout.
  • There must be a written record of this agreement.
  • Employers cannot mandate employees cash out to prevent them from utilising their annual leave.
  • The cashout payment must be equivalent to what would have been paid if an employee had taken the leave.

 

Open communication and proper record-keeping

Having clear and consistent policies on how much leave can be accrued and rolled over annually will help employees to plan accordingly and well in advance. Proper record-keeping in documenting the annual leave taken, left and cashed out must be available to both the employee and employer. The bad PR annual leave is getting seems to stem from bad HR, which has proven to be costly, yet easily manageable.

*Methodology: Sample: 500 employees throughout Australia were selected and surveyed by PollFish in November 2017. TSheets designed and paid for the survey, but the respondents were not connected to TSheets and the responses were anonymous. For more information and media inquiries, please contact media [at] tsheets.com.

 

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