For the past few years, everyone has been reluctant to take annual leave – there was nowhere to go. But things have changed. Borders are open and overseas travel is a possibility. But there’s a catch. In fact there are several catches for employers.
Catch #1: Staff resigning with large amounts of accrued annual leave
Annual leave entitlements must be paid out when a staff member resigns or retires. That could represent a large amount of money for your business – especially if you have several employees with substantial accrued leave. So check the accrued leave of all your staff and start encouraging them to take a holiday.
Catch #2: Staff wanting to use accrued annual leave to take an extended holiday
Unless you have policies (or an award) in place to prevent this, your staff are usually entitled to take all their accrued leave in one go. Pent-up demand for travel may mean you have staff wanting to take an extended holiday. As a result, you could be left with the problem of paying large amounts of holiday pay while paying current staff overtime or hiring a temporary replacement to make up the staffing shortfall.
Catch #3: Staff wanting to holiday without sufficient accrued leave
Yes, this is a thing! We have clients with employees who want to travel overseas. The trouble is, they haven’t worked long enough to accrue the leave they want. Often, it’s inexperienced staff who don’t understand the concept of building up leave so be prepared for termination threats, disappointed staff and compromise discussions.
You can force staff to take leave
If an employee has accrued more than 8 weeks leave (or 10 weeks for shift workers), employers are entitled to “force” staff to use some of it. It’s known as Excessive Leave.
The best approach is to monitor staff leave levels to prevent excessive leave occurring. When it does occur, it’s important to discuss the employee’s accrued leave situation and come to a mutually agreeable solution. If this isn’t possible, most modern awards allow employers to direct employees to take annual paid leave.
As always, there are protocols in place that must be followed. But that’s where we can help you.
Holidays should be fun – not a challenge for employers!
It’s time to examine each staff member’s accrued leave entitlements before it becomes a financial drain on your business. Then talk to us about the best steps to ensure staff holidays don’t become a financial nightmare for your business. We can also help you manage and educate any staff that are planning holidays before they have sufficient leave entitlements.
For guidance and advice tailored to the needs of you and your staff, contact the team at End2end Business Solutions by calling 02 8977 4002.