Can we make employees take annual leave?
If an employee has accrued over 200 hours of annual leave, can we direct them to take that annual leave? And is there a timeframe in which we can request the leave to be taken?
Generally, if an employee is covered by an award or enterprise agreement, you will only able to direct an employee to take leave in accordance with the provisions set out in that industrial instrument.
All modern awards allow an employer to force an employee with excessive leave (more than 8 weeks’ paid annual leave), to take that leave. At that point you may try to reach an agreement with the employee about how to reduce their 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 6 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 1 week; and
- you are not requiring the employee to take a period of paid annual leave in the next 8 weeks or after more than 12 months.
If the employee is award- or agreement-free, you can direct an employee to take leave but only where the requirement is reasonable. It will generally be reasonable where the employee has accrued an excessive amount of annual leave, e.g. where they have accrued over 8 weeks.
Whether the direction to take leave is reasonable will also depend on the amount of notice you give the employee, as well as the amount of leave you are directing them to take.