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Demystifying Annual Leave during the Coronavirus (COVID-19) Pandemic

Posted on June 03, 2020

Generally, employers may agree at any time to an employee taking annual leave. However, whether an employer can request that an employee take annual leave usually depends on the terms of the applicable industrial instrument.

The below clarifies when an employer may lawfully request an employee take annual leave in various circumstances during the COVID-19 Pandemic.

1. JobKeeper Qualifying Employers

The recent amendments to the Fair Work Act 2009 (Cth) (FW Act) regarding the JobKeeper Scheme provide that employers who qualify for JobKeeper may:

  • make a request that an eligible employee take paid annual leave (provided the employee maintains a balance of at least 2 weeks paid annual leave (s 789GJ(1)); or
  • agree in writing with the eligible employee for them to take annual leave at half pay (including annual leave loading if it applies) for twice the length of time (s 789GJ(2)).

Employees are obliged to consider the employer’s request and cannot unreasonably refuse (s 789GJ(1)(e) and (f)).

If an agreement is made under the JobKeeper provisions, it applies instead of the employee’s usual terms and conditions regarding annual leave.

2. Non-qualifying Employers

Employers who do not qualify for the JobKeeper Scheme are required to follow the provisions in the relevant modern award or enterprise agreement regarding annual leave.

Some Modern Awards have been amended to provide employers with greater flexibility during the COVID-19 pandemic, including the Hospitality Industry (General) Award, Restaurant Industry Award, Clerks – Private Sector Award and the Vehicle Manufacturing, Repair, Services and Retail Award.

These amendments permit the employer to direct an employee to take annual leave in certain circumstances during the pandemic, however, conditions such as notice periods may apply and vary depending on the applicable award.

3. Award/Agreement Free Employees

If the employee is not covered by the JobKeeper Scheme, a modern award or an industrial agreement, section 94(5) of the FW Act applies. This section provides that the employer may require an employee to take a period of leave, provided that the requirement is ‘reasonable’. A requirement is generally considered reasonable if the employee has accrued excessive annual leave, or if the business is shut down for a period of time.

Employers seeking to request an employee take annual leave should seek advice from a specialist employment lawyer regarding their individual circumstances.

Please contact Lynch Meyer on 08 8223 7600 for any assistance.

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