Employees sometimes ask us if they can transfer their personal leave to another employee who may be suffering from hardship. What would the payroll/legal repercussions be if we did this?
Some of the reasons we give employees include:
- employers are obligated to provide the entitlements as outlined in the National Employment Standards under the Fair Work Act;
- transfer of these entitlements is not permitted from one employee to another as this would be in contravention of the Act, even if you requested the transfer; and
- employers must accrue and provide leave entitlements for employees based on the type of employment and length of service.
Can you could provide any further information on this?
Everything you have said is correct. You cannot transfer any accrued annual leave or personal leave from one employee to another, even with agreement, because you have obligations to provide entitlements based on each employee’s service.
However, one practical suggestion you could make is that an employee could ‘cash out’ some of their annual leave, then forward the cash to the affected employee (though this would be a private concern). This will depend on whether the relevant Award/EBA allows for cashing out of annual leave.
If there is no award/EBA, then s 94 of the FW Act allows an employer and an employee to agree to cashing out accrued annual leave.
Given the administrative burden, you may prefer to suggest another way of raising money for the employee instead.