Business pushes to have annual leave cashed-out

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Employer groups have pushed the Fair Work Commission to modify the award system allowing more employees to cash out their annual leave by agreement.

In a submission to the industrial umpire, the Australian Industry Group requested changes giving an award-covered employee the right to cash out their accrued annual leave.

Conditions were attached requiring leave to be paid-out according to the terms of a written agreement with an employer. An employee would also need to have at least four accrued weeks of annual leave still owing after receiving his or her payment.

These conditions are intended to provide a basic safety net after the Australian Industrial Relations Tribunal (AIRC) warned against the paying-out of annual leave back in 2008.

The proposal has the overwhelming support of the business community and is wholeheartedly backed by the Australian Chamber of Commerce and Industry.

The employer push will be considered by the FWC as it conducts its four yearly review of modern awards. The cashing out of annual leave was deferred for consideration by the commission in 2012.

In its submission, the AiGroup said it was inconsistent to deny those covered by awards access to the entitlement when it had been included in enterprise agreements for other workers since the early 1990s.

There also appears to be some sympathy on the commission towards this position. “There is no valid reason why the cashing out of annual leave is more appropriately a matter for bargaining than for awards,” FWC vice president Graeme Watson said in 2012.

“The inclusion of provisions enabling the cashing out of annual leave in modern awards is an important flexibility for both employees and employers.”

Business groups are also seeking provisions allowing an employer to direct an employee to take annual leave where it has accrued to an excessive level and during close-down periods.

  • Mark McBriarty

    My grandfather would be turning over in his grave ! hard fought entitlements that were designed to ” give people a break” being sold off – if businesses are unable to manage their leave requirements maybe they need more staff- paying out annual and long service leave destroys their purpose