What is annual leave?

Annual and personal leave entitlement for full-time and casual employees - image

Your employees may take leave for many reasons such as vacations, personal business or emergencies.

Annual leave (also known as paid holiday leave) allows an employee to be paid while having time off from work. Paid annual leave is one of the minimum entitlements of Australian workers under the National Employment Standards. Awards, enterprise agreements and other registered agreements can’t offer less than the National Employment Standards, but they can give more annual leave.

Who is entitled to annual leave?

All employees (except for casual employees) get paid annual leave.

How much annual leave does an employee get?

Full-time and part-time employees get 4 weeks of annual leave, based on their ordinary hours of work. Shift workers may get up to 5 weeks of annual leave per year.

How does annual leave accumulate?

Annual leave accumulates from the first day of employment, even if an employee is in a probation period. The leave accumulates gradually during the year and any unused annual leave will roll over from year to year.

Annual leave accumulates when an employee is on:

  • Paid leave such as paid annual leave, paid sick, long service leave and carer’s leave
  • Community service leave including jury duty

Annual leave does not accumulate when the employee is on:

  • Unpaid annual leave
  • Unpaid sick/carer’s leave
  • Unpaid parental leave
  • Unpaid family and domestic violence leave.

The Australian Government’s Paid Parental Leave Scheme is not considered to be paid leave. An employee does not accumulate annual leave while being paid by the Paid Parental Leave Scheme if the person is taking unpaid leave from their employer at this time. Leave does not accumulate for a period of annual leave that has been cashed out.

Sick & carer’s leave

Sick and carer’s leave (also known as personal leave or personal / carer’s leave) lets an employee take time off to help them deal with personal illness, caring responsibilities and family emergencies.

An employee may have to take time off to care for an immediate family or household member who is sick or injured or help during a family emergency. This is known as carer’s leave, but it comes out of the employee’s personal leave balance.

The National Employment Standards includes both paid and unpaid leave entitlements.

Paid sick and carer’s leave

Who gets paid sick and carer’s leave? All employees except casuals are entitled to paid sick and carer’s leave. It is important to note that employees may have to give notice or evidence to get paid for sick and carer’s leave.

How much paid sick and carer’s leave does an employee get?

Sick and carer’s leave comes under the same leave entitlement. It’s also known as personal / carer’s leave.

Employees receive:

  • 10 days each year for full-time employees
  • Pro rata of 10 days each year depending on their hours of work for part-time employees.

Note that a registered agreement can set out different entitlements to paid sick and carer’s leave, but it can’t be less than the minimum above.

How does paid sick and carer’s leave accumulate?

Full-time and part-time employees accumulate sick and carer’s leave during a year of work. It starts to build up from an employee’s first day of work and is based on the number of hours they work. The balance at the end of each year carries over to the next year.

Sick and carer’s leave accumulates when an employee is on:

  • Paid leave such as paid annual leave and paid sick and carer’s leave
  • Community service leave including jury duty long service leave

Sick and carer’s leave does not accumulate when the employee is on:

  • Unpaid annual leave
  • Unpaid sick/carer’s leave
  • Unpaid parental leave
  • Unpaid family and domestic violence leave

How much paid sick and carer’s leave can an employee take?

An employee can take as much paid sick or carer’s leave as they have accumulated. There is no minimum or maximum amount of paid sick or carer’s leave that can be taken at a time.

What happens if paid leave runs out

1. Long periods of sick leave. An employee can take as much paid sick leave as they’ve accumulated if they aren’t fit for work because they’re sick or injured.

Protection from dismissal while on sick leave
Employees who are away from work temporarily because they’re sick or injured may be protected from being dismissed.

To be protected from dismissal during a temporary absence from work:

  • The total time away due to illness or injury must be less than 3 consecutive months, or a total of less than 3 months over 12-month period employees can be taking paid, unpaid OR
  • A combination of paid and unpaid sick leave during their absence employees need to provide evidence of their illness or injury.

Note further that when an employee is away for longer than 3 months, an employee is no longer protected from being dismissed (even if they provide evidence) if:

  • The total length of their absence due to illness or injury is more than 3 consecutive months, OR
  • A total of more than 3 months over a 12-month period over that period they’ve only taken unpaid leave, OR
  • They’ve taken a combination of paid and unpaid leave.

Employees who take a period of sick leave that is paid the whole time are protected from dismissal regardless of how long they’re on leave.

Employers must still follow the appropriate rules for carrying out a dismissal and employees may challenge the termination of their employment by:

  • Making an unfair dismissal application if the reason for the dismissal is harsh, unjust or unreasonable making a general protection claim if the reason for the dismissal is another protected reason, OR
  • Making a claim under a state or federal anti-discrimination law.

2. Unpaid carer’s leave. All employees, including casual employees, are entitled to 2 days unpaid carer’s leave.

Employees get 2 days unpaid carer’s leave each time an immediate family member or household member of the employee needs care and support because of:

  • Illness
  • Injury or
  • An emergency

Full-time and part-time employees can only get unpaid carer’s leave if they don’t have any paid sick / carer’s leave left.

Taking unpaid carer’s leave
Unpaid carer’s leave can be taken:

  • In 1 continuous period (e.g. 2 working days in a row) or
  • In separate periods as agreed between the employee and employer (e.g. 4 half days could be taken in a row)

The details of the above can be found at https://www.fairwork.gov.au/leave/annual-leave.

If you have any concerns in relation to your annual and sick leave, please contact the accountants at our Sydney city office