Can annual leave form part of a notice period?

Can annual leave form part of a notice period?

By Paul Munro on 25 July 2018 Can a period of annual leave form part of an employee’s period of notice of termination?

This question was recently sent to our Ask an Expert service.

Q Our company has decided that several positions within the organisation will be redundant. The affected employees were advised and given five weeks’ notice of termination of employment. Some employees have annual leave approved which coincides with the period of notice. We advised the employees their annual leave would run concurrently with the notice period.

One employee has been advised by his union that annual leave cannot form part of the period of notice of termination. The Fair Work Act and the applicable modern award (Manufacturing and Associated Industries and Occupations Award 2010) do not appear to provide for this circumstance.

Can a period of annual leave form part of an employee’s period of notice of termination?
 
A Where an employer gives notice of termination to an employee, generally, the answer is no. Industrial courts and tribunals have usually determined these are separate entitlements and provided for different reasons. Notice is provided to an employee to enable him or her to seek alternative work while still working. The Manufacturing Award (cl 22.3) specifically provides for employees to have time off (job search entitlement) during the period of notice to look for work. An employee given notice prior to taking annual leave or while on annual leave would be denied this opportunity.
 
Meanwhile, annual leave is provided to employees to enable them to have a break from work. Therefore, it has generally been determined that the right to notice and the right to annual leave are independent and cannot be used to cancel each other out.  

Remedy


It is advisable that the company absorbs the annual leave into the period of notice and the employees are re-credited the annual leave or, alternatively, are given an additional period of notice.  

Resignation by employee


While there are established principles relating to the circumstance when an employer gives notice of termination to an employee, these principles may not necessarily apply where an employee resigns their employment and requests to take annual leave during the notice period.

It would seem that annual leave could form part of the period of notice in that circumstance, although an employer could reasonably refuse a request to take annual leave due to operational requirements. This is because the requirement for an employee to give the appropriate period of notice is to allow an employer sufficient time to fill the position.

The bottom line: An entitlement to an appropriate period of notice of termination and an entitlement to annual leave are considered two separate employment conditions. They cannot be taken concurrently when notice is given by an employer.
 

Need more help with people management?

Australian Business Consulting and Solutions has a dedicated team of HR experts who can assist you with your specific people management issues and problems. If you would like a free and obligation-free initial assessment of what you require in terms of professional assistance, you can obtain more information from our website.


 
 

COMMENTS

No comments yet. Be the first.

YOU MIGHT BE INTERESTED IN...