Home - The rules on cashing out annual leave

UpdatesJun 24, 2017

The rules on cashing out annual leave

A provision in all modern awards is a clause that gives employees the option to cash out their annual leave

2 mins read

A provision in all modern awards is a clause that gives employees the option to cash out their annual leave – albeit in certain circumstances.

Enterprise agreements can permit cashing out. Award and agreement-free employees can also cash out, provided they satisfy the provisions of section 93 of the Fair Work Act 2009.

Those provisions state that cashing out must not leave an employee with a paid annual leave accrual of less than 4 weeks, and that each occasion when leave is cashed out must be agreed to separately in writing.

This will permit you to agree with an employee to cash out accrued annual leave subject to the following requirements:

You do not have to agree to an employee’s request to make a cashing-out agreement. Conversely, you cannot mislead an employee about their entitlements under any cashing-out agreement. Nor can you use undue influence or pressure on an employee to make a cashing out agreement.

Copied