Keeping on top of annual leave

Ensuring that annual leave is well managed within an organisation can reduce the liability of higher annual leave balances and promote a healthy workplace, which can improve productivity and attendance. An important aspect of managing annual leave is implementing a clear annual leave policy which sets out entitlements to leave and the procedure for applying for leave.

Employers should put in place a formal procedure for the request and approval of annual leave and make sure that employees understand how the procedure works. Before approving annual leave for any employee, employers need to ensure that the continuity of their operations are maintained and adequately staffed during the period in question. Employers should also ensure that records are kept of all approved leave.

Roster systems

Depending on the size of the organisation, annual leave roster systems can be implemented either across the whole business or to separate departments. Employers can seek expressions of interest from employees for annual leave periods and, after considering requests, compile an annual leave roster which caters for the requested periods, where possible.

For smaller organisations, implementing an annual leave roster system during popular periods of the year where most employees want to take leave, such as Christmas or Easter, may be beneficial for managing leave requests. This ensures a fair and equitable spread in terms of which employees take leave during these periods.

Refusing a request for leave

Under the National Employment Standards (NES), employers have the right to refuse a request for annual leave if the refusal is based on the operational requirements of the organisation and is reasonable.

However, caution should be exercised when doing so as an employee may feel they are being discriminated against or that a refusal is unreasonable. As a result, they may lodge a claim against the organisation or initiate a dispute resolution process (if available to them).

Any refusal should always be accompanied by a reason as to why the leave is not convenient at that time. The manager and the employee can then discuss another more appropriate time for annual leave to be taken.

Reasons to refuse a request for leave may include:

• Maintaining continuity of operations

When an employee requests a period of leave, employers have to make the assessment of whether their operations will allow that person to be spared at the time requested. For example, if the employee is a key staff member, and the period of leave requested falls during a very busy period, or during an important project, then the employer may refuse the request. The employee may be integral to the task at hand and the employee taking leave for part or all of the requested period may impact adversely on operations.

Such a refusal should always be accompanied by a reason as to why the leave is not convenient at that time, and the manager and the employee should discuss when would be a better time to take that leave.

• Accrued paid leave is exhausted

Employers have the right to refuse a request for paid annual leave where an employee has exhausted his/her paid entitlement. The employer will then need to decide whether to grant unpaid leave to the employee or paid leave in advance if requested. An employee does not have an automatic right to take unpaid leave or paid leave in advance.

• Refusal due to ‘shut down’ of business

Quite often an organisation will implement a ‘shut down’ period, most commonly over the Christmas/New Year period. It would be reasonable in most circumstances to decline an employee’s request for annual leave if taking such leave would result in the employee having insufficient leave to cover a ‘shut down’ of a reasonable length. However, the specific reasons surrounding the request for annual leave would need to be considered in each case.