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Major FWC annual leave case - employers and employees 'will benefit'

11 June, 2015

The Australian Industry Group has been successful in convincing a Full Bench of the Fair Work Commission to allow cashing-out of annual leave for award-covered employees, and to give employers enhanced rights to direct employees to take excessive leave.

"The decision provides important new rights for employers and important flexibilities for employers and employees. It is good news for all parties," Australian Industry Group Chief Executive, Innes Willox said.

"When awards are varied to reflect the Full Bench's decision, award-covered employees will be able to cash out any accrued annual leave in excess of four weeks' accrued leave, by agreement with their employer and subject to various safeguards.

"Employers will also have enhanced rights to direct employees to take annual leave when an excessive amount of leave has accrued. The lack of existing rights in this area has been a major headache for employers. The decision will provide welcome relief to employers and will give employees more incentive to take their annual leave.

Other important changes

  • Employers will have the right to grant annual leave in advance by agreement with an employee, with the employer having the ability to deduct payment for any leave granted in advance from money owed to the employee on termination;
  • Employers who pay their employees via Electronic Funds Transfer will have the right to pay their employees for annual leave in accordance with the usual pay cycle rather than prior to the employee commencing leave.

"The Fair Work Commission deserves to be commended for the practical and sensible approach that they have taken in this decision.  The decision justifies the substantial resources that Ai Group has devoted to this major case over the past 15 months.  The new arrangements will ensure that employees and employers have access to flexible arrangements to meet their specific circumstances," Willox said.

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