Employee leave entitlements - what you need to know

Do you really understand employee leave entitlements and how you can best manage them?

An employee, whether permanent or casual, is entitled to a range of leave benefits. This could be paid or unpaid leave. Your employees will typically know what they are entitled to but you will need to keep your finger on the pulse and guide them as to how they can access these entitlements. 

Here is a quick snapshot of the different types of leave an employee is entitled to under the National Employment Standards. If after reading this, you feel like you need more information, visit https://www.fairwork.gov.au/leave where each type of leave is addressed in more detail.

Annual leave

Full time and part-time employees get 4 weeks of annual leave based on their ordinary hours of work. A part-time employee will accumulate pro-rated against the ordinary hours they work  (For example a part-time employee who works 20 hours per week, will be entitled to 80 hours of annual leave - equivalent of 4 weeks for them) . If you have shift workers as part of your workforce, they may be entitled to more leave benefits. Please refer to your award if this is the case.

Annual leave accummulates from the day an employee starts with you. An employee accumulates leave while they are on paid leave of any kind (including carers leave and long service leave) Annual leave does not accumulate if an employee takes unpaid leave, including the government paid parental leave scheme.

How an employee applies for and takes their leave is dependent on the business needs. Businesses are encouraged to have a leave process and policy in place to be able to ensure their needs are still met even if employees are on leave.

Any accumulated leave, not taken when employment ends,  is paid out on termination.

Many companies are considering additional leave including; additional day for each year of service (after a certain period), birthday leave, purchasing leave.  Consider whether your business is able to offer additional benefits around leave, it can be great for your employee value proposition and an incentive to your current team.  Many people value this more than a salary increase.

Sick/carer’s leave

This leave allows an employee to take leave if they are suffering from personal illness, or caring for an immediate family member or household member who is suffering from an illness. Sick leave can also be used when there is an emergency with the employee or their family.

Employees are entitled to 10 days of sick/carer’s leave during a 12 month period. An immediate family member or household member is a; Spouse/partner, de facto, child, parent, grandparent, grandchild, siblings or anyone living with the employee.

Sick and Carer’s leave is not paid out at termination, however some companies are incentivising people who dont take their sick leave by adding a bonus of some kind into the mix.  Be careful here, people shouldn't be encouraged to 'soldier on' when they/loved ones are genuinly sick.  

Many companies are allowing their employees to take a mental health day (no questions asked) 2-4 times per year and access their sick leave balances.  Make sure you have a process around this that covers off when and how this will happen.

Family + domestic violence leave

All employees (full-tme, part-time and casuals)  can access 10 days of paid leave each year to manage family & domestic violence matters as laid out in the National Employment Standards.  This may be directly or a close relative, member of the household or current or former partner of an employee.

It is important as an employer that you understand this entitlement and allow your employees to access leave should they need to deal with or act on a family and domestic violence situation..

Family and domestic violence refers to violent, threatening or abusive behaviour by someone close to the employee/employees family member who seeks to coerce or control them or cause them harm or fear. 

You may also wish to have information in relation to support services available to your employees if needed.

This paid leave is available immediately and in full.  It resets annually and does not accumulate each year.

The Fair Work website provides a number of resources in relation to this including a checklist to help you support the employee.

Compassionate/bereavement leave

All employees including casuals are entitled to this leave. Compassionate or bereavement leave can be taken when a member of an employee’s immediate family or household member dies or develops or contracts a life-threatening illness or injury, or any party has a miscarriage/stillborn.

 Full time and part-time employees are entitled to 2 days paid leave (Casuals unpaid) each time this occurs. This leave can be taken in different ways to suit this circumstances.

Compassionate leave does not accumulate or get paid out on termination. It also does not come out of sick leave benefits. It is separate leave and can be applied at the time of the above definition any time an employee needs it.

If an employee is on annual leave or sick leave at the time, they can use compassionate leave instead of other leave benefits.

It is important that employees understand the process and definition of compassionate leave and know to notify you as soon as they can, along with the period of leave they expect to take. You as the employer may grant compassionate leave for non-immediate family members or non-household members, on agreement. You can also request evidence around the reason for compassionate leave, however, this evidence must be reasonable. An award or registered agreement may detail terms around evidence that you can use as a guide. 

Maternity + parental leave

Permanent employees are entitled to 12 months of unpaid parental leave. They can also request an additional 12 months of leave. The entitlement kicks in once an employee has been with your business for 12 months before the leave starts and have or will have responsibility for the care of the child.

Casuals can also be entitled to unpaid parental leave if they have been working regularly with your business for at least 12 months and they planned to continue to work with your business, regularly if it had not been for the birth or adoption of a child.

As an employer, it is important that you understand the process around parental leave and that you have good practices in place to ensure that you do not discriminate or disadvantage an employee. Having a process from preparation through to return to work will be a valuable tool in your business.  Go to the parental leave pages of the Fair Work website to review more information and download checklists.

Note, if you have an employee couple, they are entitled to take leave at the same time for a maximum of 8 weeks within the first 12 months of birth or adoption.

Public holidays

Good practice is to know your public holidays (in each state) so that you can ensure you action the relevant entitlements or wages for these days. An employee is entitled to public holidays depending on where they are based, not where they may be working on the day of the public holiday.

Employees have the right to be absent from work on a public holiday.   Employees who dont usually work a public holiday (i.e. part time employee doesnt work Monday's) are not entitled to payment.   Make sure you refer to your award or agreement about the rules around working and not working on public holidays.

To get a full list of public holiday's under the NES click here.

Community service leave

Employees are entitled to take leave for activities such as voluntary emergency management (i.e. SES for example) and jury duty.  As an employer, you will be obligated to pay some of your employees’ salary while they are on jury duty.  

With the exception of Jury Duty, community service leave is unpaid and the employee is entitled to take leave for as long as they are engaged in the activity. It is important that the employee provides you with notice and expected absence, as soon as possible. You can also request evidence from the employee to confirm that they are entitled to community service leave.

Consider including an onboarding question with your employees to understand if they do belong to a recognised emergency management body like the SES or Defence reservist.

Please note that Defence Reservists have additional workplace protections under the Defence Reserve Service (Protection) Act 2001. You can read more about their rights and responsibilities at work here. 

Long service leave

Employees become entitled to this kind of leave after a long period of working for their employer, each state or territory have slightly different laws.  The laws set out how long the employee has to be working to get long service leave and how much leave they are entitled to.  Casuals are entitled to long service leave under some state and territory laws.

It is important to continually monitor tenure in your business and it is something your payroll team and/or your HR team can provide.  If you have or are getting to the point where you may need to administer these entitlements, it is important that you know your obligations in the state the employee resides in.  To access links to the relevant agency click here.

Note also that there are different rules if your business is part of a pre-modern award (before January 1, 2010) so you will need to know your dates around this to make sure you apply the correct rules. You can find information about the federal pre-modern awards by searching the Fair Work Commissions database or calling them at 13 13 94.

Wrapping it up

Unpaid leave is available to all employees whether permanent or casual in a variety of circumstances. If your business is structured in a way that can enable employees to take their leave benefits when they need it, it automatically improves engagement , culture and improved mental health. If you dont have a leave policy where you share your approach to the different entitlements, let us know, we can help.