Forcing Employees to Take Annual Leave

It has been recently reported that the Commonwealth Corporation, Airservices Australia Pty Ltd (Airservices) has been fined for incorrectly forcing its staff to take leave during the annual Christmas shutdown period. The primary reason provided for this finding was the failure of Airservices to consult with each of its employees regarding the shutdown period, in breach of its workplace enterprise agreement.

In October 2015, Airservices informed staff that they would be required to take their leave during the shutdown period. It was brought to the attention of Airservices in December that this decision may have been in breach of their enterprise agreement, however Airservices proceeded regardless. In the particular circumstances of Airservices, the enterprise agreement legally required Airservices to consult with employees prior to allocating leave, which they neglected to do.

This situation need not be a cause for concern for employers. It is mandated by the Fair Work Act 2009 (Cth) (the Act) for all workplace agreements to contain a consultation term. This term requires the employer to consult with employees about major workplace changes likely to have a significant effect on the employees or a change to their regular roster or ordinary hours of work.

In relation specifically to requiring leave to be taken during the Christmas/New Year shutdown period, the outcome will vary on a case-by-case basis depending on the provisions of the relevant award and/or enterprise agreement. Section 93(3) of the Act allows an award or enterprise agreement to include a term requiring or allowing an employee to take leave in particular circumstances, such as the Christmas/New Year shutdown period, but only if the requirement is reasonable. When contemplating what a reasonable requirement in this context might be, the Fair Work Commission, via the Explanatory Memorandum for the Act has stated the following relevant considerations:

  • the needs of both the employee and the employer’s business;
  • any agreed arrangement with the employee;
  • the custom and practice in the business;
  • the timing of the requirement or direction to take leave; and
  • the reasonableness of the period of notice given to the employee to take leave.

However, outcomes like the Airservices case can be readily avoided. By having clear procedures and guidelines in place alongside sound legal consultation, employers and employees ought to be able to consult regarding leave and other workplace entitlements seamlessly.

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