Employee leave entitlements can often be tricky for practices to navigate. It is critical that employers understand employee leave entitlements, as disputes about leave can damage employment relationships and reduce productivity. A well-drafted leave policy is an effective way for a practice to communicate its expectations to employees and is undoubtedly helpful to resolve any disputes that may arise over leave entitlements.
This guide will cover the different types of leave accessible to National System employees, and what should be included in a leave policy and how it can be used to manage employee leave entitlements.
The Fair Work Act 2009 (Cth) (the Act) and the National Employment Standards (NES).
The Act is the foundation of Australian workplace relations and includes the NES. The NES represent the minimum entitlements that must be provided to all employees. Among others, these include several leave entitlements:
- Parental leave and related entitlements;
- Annual leave;
- Personal/Carer’s Leave, compassionate leave and unpaid family and domestic violence leave;
- Community Service Leave;
- Long Service Leave;
- Public Holidays.
This guide will focus on Annual leave and Personal/Carer’s leave as these are the most accessed leave entitlements.
Annual leave
For each year of service, employees, other than casuals, are entitled to accrue 4 weeks of paid annual leave. Shiftworkers are entitled to 5 weeks of paid annual leave per year. The entitlement to paid annual leave accrues progressively according to the employee's ordinary hours of work, and accumulates from year to year.
Importantly, part-time employees accrue annual leave on a pro-rata basis. An example of this is an employee who works 20 hours per week for a year. In one year, the employee will accumulate 80 hours of annual leave (the equivalent of 4 weeks work for her).
Paid annual leave may be taken at a time agreed between an employee and their employer. This means that employees cannot simply take leave at any time they choose, however, practices should note that an employer must not unreasonably refuse to agree to a request by the employee to take paid annual leave.
When an employee takes a period of paid annual leave, the employer must pay the employee at the employee's base rate of pay for the employee's ordinary hours of work in the period.
Annual leave entitlements are also payable upon termination, meaning that if, when employment ends, the employee has annual leave accrued but not taken, the practice is required to pay it out.
Annual leave under the Health Professionals and Support Services Award 2020 (HPSS)
Many employees within dental practices are covered by the HPSS. Additional provisions relating to annual leave apply to employees that are covered by the HPSS.
These include:
- Annual leave loading
In addition to their ordinary pay, an employee who is not a shiftworker will be paid an annual leave loading of 17.5% of their minimum rate of pay. For employees receiving above-award payments, the employee is entitled to receive the higher rate while on a period of paid annual leave.
- Annual leave in advance
An employer and employee may agree in writing to the employee taking a period of paid annual leave before the employee has accrued an entitlement to the leave. An agreement must be signed and state the amount of leave to be taken in advance and the date on which leave is to commence.
If the employment relationship ends and the employee has not accrued back the leave taken in advance – their leave balance is still “negative” – the employer may deduct from any money due to the employee on termination an amount equivalent to the value of leave paid in advance minus leave they have accrued since the leave in advance was taken.
- Close down periods
When an employer temporarily closes a dental practice, an employee may be directed to take paid annual leave during part or all of this period provided such direction is reasonable.
- Cashing out annual leave
By agreement in writing, employers and employee covered by the HPSS can cash out annual leave provided that;
- The payment is not less than what the employee would have received if they had taken the leave at the time the payment is made;
- The agreement does not result in the employee’s remaining accrued entitlement to paid annual leave being less than 4 weeks; and
- The maximum amount of paid annual leave that be cashed out in any period of 12 months is 2 weeks.
- Excessive leave accruals
If an employee has accrued more than 8 weeks paid annual leave it is considered an excessive leave accrual. The HPSS provides that an employer may direct the employee in writing to take a period of paid annual leave provided that;
- the employee’s remaining accrued entitlement to paid annual leave cannot be less than 6 weeks;
- the employee cannot be required to take a period of paid annual leave of less than one week; and
- the period of paid annual leave cannot begin less than 8 weeks, or more than 12 months,after the direction to take leave is given.
Before a direction is made, however, practices must attempt to reach genuine agreement as to when the leave will be taken.
Personal/Carer’s leave
Casual employees are not entitled to paid personal/carers’ leave. Full-time employees accrue 10 days of paid personal leave for each year of service and part-time employees receive a pro-rata entitlement depending on their ordinary hours of work. Personal/carers’ leave can be taken at any time and in any amount.
Personal/carer’s leave can be taken by an employee:
- because they are not fit for work because of a personal illness or injury affecting the employee: or
- to provide care or support to an immediate family member or member of their household, who requires care or support because of a personal illness, injury or an unexpected emergency.
The Act requires that an employee must notify their employer if they taking personal/carer’s leave or compassionate leave as soon as practicable (which may be after the leave has started) and they must advise their employer of the period, or expected period, of the leave.
Practices can require employees provide evidence to satisfy a reasonable person that the leave is being taken for a valid reason.
Taking personal/carer’s leave is a workplace right, which means a practice cannot take adverse action, such as terminating the employee or giving them a warning for taking the leave.
Compassionate leave
All employees (except casuals) are entitled to take 2 days’ of paid compassionate leave for each occasion when a member of the employee's immediate family or a member of the employee's household:
- contracts or develops a personal illness that poses a serious threat to his or her life; or
- sustains a personal injury that poses a serious threat to his or her life; or
- dies.
Compassionate leave can be taken either as a single continuous 2 day period, 2 separate periods of 1 day each or any separate periods by agreement.
Leave Policies - What to include?
A leave policy is a useful tool to manage leave in your practice as it clearly communicates to employees what their leave entitlements are, and what processes employees need to follow when accessing leave.
This can include outlining that an employee is required to provide a certain amount of notice of their intention to take a period of annual leave, and the way in which they need to request it. For example, the practice may utilise a leave request form, or require the employee to email the practice owner and manager. In addition, the policy can specify certain periods in which employees cannot apply for leave, such as busy periods around Christmas and school holidays.
The policy should also prescribe how the practice expects employees to call in sick for work. The practice may require employees to call, rather than text, or send an email instead. Having a policy on this ensures that everyone is on the same page.
It is also recommended to specify what happens if the employee breaches the requirements, which may include disciplinary action. For example, if an employee does not apply for leave in accordance with the Policy, or takes leave without approval, they may be subject to a disciplinary process.
For further information or assistance with leave entitlements in your practice, please do not hesitate to contact the ADA HR Advisory Service on 1300 232 462.