The Fair Work Commission (FWC) is in the process of undertaking
the first four yearly review of modern awards (commencing in 2014).
The review involves an intensive examination of all modern awards,
and proposals for adjustment from employers and employees and their
associations and unions, as well as a "plain language"
project to improve the readability of awards. The review is picking
up many issues which could not be dealt with during the award
modernisation process in 2009.
Among the issues being addressed by the FWC are several aspects
of annual leave:
Cashing out of annual leave
Paid leave and electronic funds transfer
Granting annual leave in advance
Excessive annual leave.
On 23 May 2016, the FWC released a 104 page decision canvassing
the submissions made by all interested parties on previous
in-principle decisions, and determined which model clauses would be
inserted into which awards.
The model clauses dealing with:
Cashing out of annual leave will be inserted into 112
Paid annual leave will be inserted into 51 awards
Leave in advance will be inserted into 113 modern awards
Excessive annual leave will be inserted into 80 modern
The model clauses:
Allow annual leave to be cashed out rather than taken, within
fairly strict parameters (for example, a maximum of two weeks per
Allow employers to use EFT to pay wages while annual leave is
being taken (rather than having to pay it prior to the leave being
taken, which was the previous provision in some awards)
Facilitate an employee taking leave in advance of it being
accrued, and consequential adjustments to future entitlements
Allow an employer to direct an employee to take leave if their
accrued leave balance is excessive (more than six weeks) so long as
the employer gives the employee four weeks' notice to take the
leave, and the employee retains at least four weeks leave after the
direction given by the employer.
When the changes will take effect has yet to be determined, but
we will provide information about this to our clients as the review
process comes to a conclusion.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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An employee that refused a reasonable offer of settlement was ordered by the FWC to pay his ex-employer's legal costs.
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