Annual leave, Hours, Contracts - employer questions about WorkChoices


Annual leave, Hours, Contracts - employer questions about WorkChoices

This article is the eighth in a series that summarises the employer position under WorkChoices. The focus of this article is on questions relating to annual leave, hours of employment and contracts.


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This article is the eighth in a series that summarises the employer position under WorkChoices. The focus of this article is on questions relating to annual leave, hours of employment and contracts.

While many views have been given on some of the issues, nothing is conclusive until determined by the relevant courts.

These articles provide a snapshot of the types of questions that have frequently been asked by employers since the introduction of WorkChoices.

Constitutional corporations

As with the other articles in this series the answers are on the understanding that the employer is a constitutional corporation, unless otherwise specified. The questions are listed under particular topics to assist subscribers.

Annual leave: in advance; direction to take

Can an employee take annual leave in advance?

Where the WorkChoices Standard applies, an employee cannot take more annual leave than has been accrued and credited to the employee at the time of taking leave. An employee does not have to wait 12 months to take annual leave and is free to take, for example, one day (7.6 hours) after completing a four week period if authorised by the employer.

Shut-down: This problem can also occur when the employer implements an annual shut-down. Where an employee has insufficient accrual of leave the employer cannot send any employee on any period of the shut-down that would be unpaid.

Accrual: A full-time employee engaged to work 38 hours per week will accrue 11.7 hours annual leave at the end of each completed four week period (1/13 of 152 hours every four weeks). If the employee's nominal hours worked do not vary, the employee will accrue 152 hours of annual leave in a 12 month period (4 X 38 hour week).

At what level of accrued annual leave can the employer force an employee to go on leave? How much of the accrual can be forced to be taken and how much notice must be given?

The annual leave Standard under WorkChoices does not appear to give the employer a specific right to send an employee on annual leave, except in certain circumstances.

The exceptions to this are that an employer may direct an employee to take annual leave when the employer shuts down the business (eg over Christmas or Easter), provided the employee has enough accrued leave to cover the period of the shut-down, or an employer may direct an employee to take up to one-quarter of annual leave if the employee has accumulated an annual leave credit greater than what would be accrued over two years.

No notice of shut-down: Under the Standard, where the employer intends to send an employee on a shut-down or extended annual leave no amount of notice is required to be given by the employer to the employees.

Hours of work: averaging required?

My employees are covered under a State award (NAPSA) that provides span of hours and the maximum number of ordinary hours that can be worked by an employee each day. I understand the WorkChoices Standard provides for an averaging of hours over a 12 month period. Does this provision override the hours provisions in the Award?

The answer is no.

Under WorkChoices, the hours clause in a pre-reform federal award or NAPSA will prevail over the Standard for a period of three years. Even if the pre-reform instrument provides for a 40 hour week this condition will continue to apply.

The hours Standard, however, will apply to any new workplace agreement negotiated under WorkChoices, and the averaging arrangement could then be agreed to (in writing). The hours clause in pre-reform agreements will continue to apply until the existing agreement is terminated or replaced.

Contract of employment: impact of WorkChoices

Our staff are employed via common law contracts, although there is a relevant State award. Are there any actions that we are required to do as a result of WorkChoices? For example, do we need to issue new employment contracts to staff which include the WorkChoices Standards?

The WorkChoices Standard will override any condition contained in a contract of employment or a pre-reform federal award or NAPSA where it's at least as generous as the pre-reform provision.

It is quite likely that the annual leave, parental leave and personal/ carer's leave provisions under WorkChoices will be either equal to or more generous than the provisions of a pre-reform award, NAPSA or contract of employment and, therefore, the Standard will generally apply. Other conditions prescribed under WorkChoices that could override the Award or contract of employment include notice of termination by the employer, and in every case, compassionate leave and provisions with respect to working public holidays.

For the sake of clarity, it may be worthwhile to redraft an individual employee's contract of employment to include the WorkChoices Standard, where relevant.


Common questions from employers about WorkChoices



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