Can an Employer Refuse Annual Leave? (2021 Update)
Permanent employees in Australia are entitled to paid annual leave. Find out in what circumstances your employer can refuse annual leave here.
Employees have certain rights and entitlements in their course of employment. Some of these include remuneration, a safe work environment and leave entitlements. Annual leave is a form of paid leave and is accrued at different rates depending on the hours employees work. However, an employer needs to first approve an employee’s request for annual leave. In this article, we’ll explain how annual leave works and when your employer can refuse your request.
Who can take annual leave?
Under the Federal Government’s National Employment Standards (NES), full-time and part-time employees have the right to take annual leave. Employees accrue 4 weeks of annual leave per year but there is no requirement to use those 4 weeks every year. However, if an employee has accrued an excess of annual leave, they may be directed by their employer to use it. Leave is paid based upon an employees’ ordinary hours.
- An employee who works 20 hours per week (part-time) will accrue 80 hours of leave annually.
- An employee who works 38 hours (full time) per week will accrue 152 hours of leave annually.
Annual leave also accumulates when an employee is on paid sick leave, jury duty, and long service leave. Employees may wish to exercise this entitlement at convenient times such as holidays or birthdays. However, annual leave usually does not accrue when an employee is on unpaid leave. Furthermore, the process for taking annual leave is outlined in the agreement between employer and employee.
Requesting annual leave
Full-time and part-time employees accrue 4 weeks of annual leave per year. Although, shift workers may earn accrue than 4 weeks per year depending on the circumstances. However, there is no minimum or maximum amount of hours an employee needs to take for annual leave. Annual leave accumulates on the day you are first employed and will roll over to the next year if you do not choose to use your annual leave. Therefore, an employee can potentially take more than 4 weeks of annual leave in a year if they have accrued enough hours. Further, when employment ends, employees must be paid out any untaken annual leave. Alternatively, they may also ask to cash out annual leave during employment depending on the circumstances.
The process to request annual leave is outlined in an award, registered agreement, company policy or employment contract. As annual leave is a right for all permanent employees, an employer cannot unreasonably refuse a request.
What is an unreasonable ground of refusal?
The Fair Work Commission have confirmed that an employer can refuse a request where there is a ‘genuine, sound business reason’. However, what constitutes an unreasonable refusal depends on a number of things. Relevant factors may include:
- The period over which the employee wants to take leave;
- The operational requirements of the business during the leave period;
- Whether the leave would cause a detriment to the business; and
- Whether the employee gave reasonable notice
Businesses may often have a period known as a “Block Out Period” where they refuse annual leave requested in this time. Block Out Periods usually coincide with big holidays when businesses are at their busiest. In Stevens v Horsley Park Supermarket Pty Ltd  FWC 4626, the Fair Work Commissioner stated that Block Out Periods during Easter, Christmas and New Year are generally reasonable for retail businesses. However, exceptions do apply and the relevant factors for unreasonable grounds of refusal still need to be considered.
Further, an employer can refuse if the employee does not have any accrued leave. For example, if an employee has already taken 4 weeks of leave in the year and they have not accrued any additional hours. Employers have the option of whether to grant the employee unpaid leave or let their entitlements fall into a negative leave balance. However, employees have no obligation to approve ‘leave in advance’ before it has been accrued.
In most cases, your employer should approve your request for annual leave if you provide adequate notice. However, you may face some difficulties having leave approved during a Block Out Period. If you believe your employer has unreasonably refused your request, it may be worth contacting an employment lawyer for further advice.
Ashlee is a legal intern working in the content team at Lawpath. She is interested in information technology law, and all things innovation. Ashlee is currently completing a Dual Degree of Law/Commerce at the University of New South Wales.