Annual leave and the Standard - employer questions about WorkChoices

Q&A

Annual leave and the Standard - employer questions about WorkChoices

Annual leave under WorkChoices needs careful attention. Here are some questions and answers addressing annual leave and the impact of the Australian Fair Pay and Conditions Standard.

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Annual leave under WorkChoices needs careful attention. Here are some questions and answers addressing annual leave and the impact of the Australian Fair Pay and Conditions Standard.

This is another in a series of articles on the most commonly asked questions by employers on aspects of the WorkChoices legislation. It is intended that this series will assist employers in understanding the complex issues raised by the new legislation and, in some instances, highlight areas that may require further legislative amendment or may be potentially areas of future legal challenge.

As with all articles with respect to WorkChoices the commentary is based on the presumption that the employer is a constitutional corporation, unless otherwise specified.

Ordinary pay for annual leave

Q. When does a pre-existing award or NAPSA prevail over the annual leave Standard under WorkChoices? The annual leave clause in the NAPSA contains many provisions that appear to be more beneficial to the employees than the Standard.

A. This depends on whether the annual leave has been accrued subsequent to WorkChoices.

The definition of ordinary pay for annual leave purposes under the Standard only relates to annual leave accrued since 27 March 2006, however annual leave accrued prior to this would be subject to the definition of ordinary pay contained in the industrial instrument or annual leave legislation that applied to the employee prior to WorkChoices.

Shift allowances

A point about shift allowances - an employer with an employee(s) covered either by a pre-reform Federal award or NAPSA should check the annual leave loading clause as this clause usually prescribes the payment of a loading (say 17 1/2%) or the shift allowances the employee would have received during the annual leave period, whichever is the greater.

This means shift allowances under the relevant pre-reform award or NAPSA may be payable during a period of post-WorkChoices accrued annual leave if greater than the prescribed annual leave loading.

NAPSA or the Standard?

Q. When does a pre-existing award or NAPSA prevail over the annual leave Standard under WorkChoices? The annual leave clause in the NAPSA contains many provisions that appear to be more beneficial to the employees than the Standard.

A. The 'more generous' test is applied to the quantum of annual leave prescribed by the pre-reform award or NAPSA compared to the Standard.

This means that where a pre-reform award or NAPSA provides four weeks' annual leave, this is equal to (but not more generous than) the Standard; consequently the Standard will prevail. The exception to this is where an employee previously had an entitlement to annual leave but the Standard takes this entitlement away (eg casual employees, in some instances). In these circumstances, the employee will continue to receive the annual leave entitlement as per the applicable instrument or legislation.

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