By Charles Power

Many companies, regardless of the number of employees they have, can experience a situation where they have workers who have negative annual and personal/carer’s leave.

If you find this situation is starting to spiral out of control – or has the potential to – you are able to amend your leave policies to include the following statements (for instance):

• all negative leave requires a medical certificate; and
• there will be a five-day cap on negative leave except with the managing director’s/head of HR’s approval.

Although it is possible to change your leave policies, it is best to do it in consultation with your employees.

Providing evidence

The Fair Work Act 2009 (Cth) (FW Act) allows you to request that an employee provides a medical certificate, or evidence that the leave was taken for the purposes specified under the personal/carer’s leave provisions.

The FW Act does not prohibit an employee from taking more than their accrued amount of annual or personal/carer’s leave. It’s up to your workplace policies.

Hence, your policies may be changed to allow the employee to take up to five days’ leave beyond what has been accrued, as an example.

As with the implementation and change of any workplace policies, employees should be made aware of the changes. This is particularly important in the context of taking negative annual leave.

Important: If a worker terminates their employment with your business and you wish to deduct the excessive leave from their final pay, the employee must have agreed to such a deduction, either by reading and signing the new and improved policy, or by signing an agreement to deduct the amount of money from their final pay.

Excessive leave accrual provisions under modern awards

On the other hand, what can you do if you employ a ‘workaholic’ or two who have banked a large amount of annual leave?

In May 2016, the FWC varied all modern awards to allow you to force an employee with excessive annual leave to take some of that leave.

The leave accrual will be excessive if the employee has accrued more than eight weeks’ paid annual leave (or more than 10 weeks’ paid annual leave for a shift worker).

If an employee has accrued excessive leave, you may try to reach agreement with them on how to reduce the accrued leave.

If you have genuinely tried to reach agreement with an employee, but agreement is not reached, you may direct the employee in writing to take one or more periods of paid annual leave, as long as:

• the employee’s remaining accrued entitlement to paid annual leave is not less than six weeks when any other paid leave arrangements are taken into account;
• you are not requiring the employee to take any period of paid annual leave of less than one week; and
• you are not requiring the employee to take a period of paid annual leave in the next eight weeks or after more than 12 months.