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Cashing out of annual leave
adjournment
To end proceedings or to suspend them to another time or place.
appeal
To request that a decision of a single member of the Commission be reviewed by a Full Bench to determine if the decision made is consistent with the Fair Work Act 2009. An appeal can only be made on the grounds that an error of law or fact has been made. A person must seek the permission of the Commission to lodge an appeal by lodging a Form F7—Notice of Appeal.
bullying at work
Bullying at work, as defined by the Fair Work Act 2009, occurs when:
- a person or a group of people behaves unreasonably and repeatedly towards a worker or a group of workers while at work, and
- the behaviour creates a risk to health and safety.
Bullying does not include reasonable management action carried out in a reasonable manner.
bullying policy
A formal procedure outlining the processes used, including disciplinary measures, to resolve bullying in the workplace. A policy would normally include definitions of bullying, a worker's responsibility in relation to bullying and the step by step process that should be adopted when bullying is reported.
code of conduct
A set of rules and responsibilities that govern an organisation. A code of conduct generally sets out appropriate and inappropriate behaviour of employees within an organisation.
Commission
Abbreviation for Fair Work Commission.
Commonwealth
Refers to the Commonwealth government or an Australian territory.
conference
A private proceeding conducted by a Fair Work Commission Member.
constitutionally covered business
A constitutionally covered business is:
- a proprietary limited company
- a foreign corporation
- a trading or financial corporation formed within the limits of the Commonwealth
- the Commonwealth
- the Commonwealth authority
- a body corporate incorporated in a territory
- a business or organisation conducted principally in a territory or Commonwealth place.
It does not include sole traders, partnerships, some state government employees, corporations whose main activity is not trading or financial.
decision
A judgment or conclusion reached after considering the facts and law. A decision in relation to a matter before the Commission can include the names of the parties and will generally outline the basis for the application, comment on the evidence provided and include the judgment of the Commission in relation to the matter. A decision can be made by a single member or a Full Bench of the Commission. It is legally enforceable.
directions
Instructions given to the parties by the Commission that set out a timetable in accordance with which they must file in the Commission and serve on each other an outline of submissions, witness statements and any supporting documents.
evidence
Information which tends to prove or disprove the existence of particular belief, fact or proposition. Certain evidence may or may not be accepted by the Commission, however the Commission is not bound the normal rules of evidence. Evidence is usually contained within or attached to a witness statement or provided verbally by a witness in a hearing.
Fair Work Act 2009
The principal Commonwealth law governing Australia's workplace relations system. Go to the Fair Work Act 2009.
Fair Work Commission
Australia's independent, national workplace relations tribunal, established under the Fair Work Act 2009, from July 2009 to December 2012. Fair Work Australia assumed the functions of the Australian Industrial Relations Commission, and the Australian Fair Pay Commission and the agreement-making function of the Workplace Authority. Fair Work Australia was renamed the Fair Work Commission on 1 January 2013.
Full Bench
A Full Bench of the Fair Work Commission is convened by the Fair Work Commission President and comprises at least three Fair Work Commission Members, one of whom must be a Deputy President. Full Benches are convened to hear appeals, matters of significant national interest and various other matters specifically provided for in the Fair Work Act 2009.
harassment
Unwanted and offensive conduct or behaviour by a person or persons directed towards another person based on an attribute such as a person’s age, gender, race, religion or a disability. Harassment can be physical or psychological.
hearing
A public proceeding conducted by a Fair Work Commission Member. A hearing is generally more formal than a conference, and may be held if the matter can't be resolved at mediation, conciliation or conference.
jurisdiction
The scope of the Commission’s power and what the Commission can and cannot do. The power of the Commission to deal with matters is contained in legislation. The Commission can only deal with matters for which it has been given power by the Commonwealth Parliament.
jurisdictional objection
An objection to an application on the basis that the Fair Work Commission does not have jurisdiction to deal with the matter. A jurisdictional objection is not simply that the respondent thinks the applicant's case has no merit.
matter
A case or legal proceeding before the Commission.
mediation
An informal, confidential and voluntary process. It is one of the processes used by the Commission to facilitate the resolution of a grievance or a dispute between parties by helping them reach an agreement.
Member
A person appointed by the Governor-General to decide matters at the Commission. A Member may be the President, a Vice President, a Deputy President or a Commissioner.
non-constitutional corporation
An entity that is not a constitutional corporation. The following are not constitutional corporations:
- sole traders
- partnerships
- some state government bodies
- corporations whose activities do not include significant trading or financial functions (e.g. some charities).
order
An order is a ruling made by a Fair Work Commission Member after he or she hears your case. Once an order has been made, anyone bound by that order must follow it.
outcome
The end result of an application made to the Commission.
outline of submissions
A written document that clearly sets out the key elements of a case. All facts, information and evidence that you wish to bring to the attention of the Commission should be included in your outline of submissions.
partnership
An organisation in which two or more persons carry on a business together and it is not a constitutional corporation as defined.
party
A person or organisation involved in a matter before the Commission. A party is generally known as either an applicant or a respondent.
principal
A person or business that has entered into a contract for services with an independent contractor.
private enterprise
A business owned and operated by private individuals for profit, instead of by a government or its agencies.
procedural fairness
When persons are treated equally or fairly before the law (also known as due process). For example, procedural fairness occurs when both parties to a dispute have an opportunity to be heard or to defend themselves.
pty ltd
A proprietary limited company. A constitutionally covered business.
reasonable management action
In relation to an anti-bullying application, reasonable management action is the action or behaviour of management that is considered to be carried out in a reasonable manner. Reasonable management action does not constitute workplace bullying.
Reasonable management action may include:
- performance management processes
- disciplinary action for misconduct
- informing a worker about unsatisfactory work performance or inappropriate work behaviour
- asking a worker to perform reasonable duties in keeping with their job, and
- maintaining reasonable workplace goals and standards.
In each of these examples, if they are not carried out in a reasonable manner, then they could still be considered bullying.
Rules
service/to serve
A requirement to send a copy of a document (and all supporting documents) to another party or their representative, usually within a specified period. A person’s obligation to serve documents can be met in a number of ways. The acceptable ways in which a document can be served are listed in Parts 7 and 8 of the Fair Work Commissions Rules 2013.
sole trader
An organisation in which one person is responsible for the business.
WHS
Abbreviation for work health and safety.
WHS state or territory regulator
A body established by a state or territory government which regulates WHS laws in a particular state or territory. To find contact details for the regulator in your state or territory, go to the Enquiries page.
witness statement
A person who gives evidence in relation to something they saw, heard or experienced. A witness is required to take oath or affirmation before giving evidence at a formal hearing. The witness will be examined by the party that called them and may be cross examined by the opposing party to test their evidence.
worker
In relation to an anti-bullying application, the definition of a worker is drawn from the Work Health and Safety Act 2011. A worker can include:
- an employee
- a contractor or subcontractor
- a person employed by a labour hire company who is working at a particular business or organisation
- an outworker
- an apprentice or a trainee
- a work experience student
- a volunteer.
Only people who are considered to be workers may apply for an order to stop bullying at work.
workplace
A place where a person performs work.
workplace bullying
See bullying at work.
Introduction
Under the National Employment Standards (NES) all employees covered by the national workplace relations system other than casual employees are entitled to a minimum of four weeks’ paid annual leave each year, or five weeks’ for certain shiftworkers[1].
Annual leave accrues progressively during the year according to an employee’s ordinary hours of work.
Following recent decisions of the Fair Work Commission, most modern awards now allow employees to whom they apply, to cash out annual leave in certain circumstances.
How does it work?
Under the new cashing out of annual leave clause now included in most awards, an employee may cash out a particular amount of accrued paid annual leave if the following conditions are met:
- the employer and employee agree in writing to the cashing out
- the payment made to the employee must not be less than the amount that would have been payable had the employee taken the leave at the time the payment is made
- the agreement to cash out annual leave must not result in the employee’s remaining paid annual leave balance being less than four weeks, and
- the maximum amount of annual leave that may be cashed out in any period of 12 months is two weeks.
Each cashing out of a particular amount of paid annual leave must be the subject of a separate written agreement. The written agreement must:
- state the amount of leave to be cashed out and the payment to be made to the employee for it
- state the date on which the payment is to be made, and
- be signed by the employer and employee and, if the employee is under 18 years of age, by the employee’s parent or guardian.
The employer must keep a copy of the written agreement as an employee record.
Can cashing out of annual leave clauses be included in enterprise agreements?
Enterprise agreements may already contain cashing out of annual leave clauses.
Parties negotiating new enterprise agreements should be aware of the cashing out of annual leave clauses in modern awards as they may be relevant to the better off overall test.
Further information
The Fair Work Commission has developed a template agreement to cash out annual leave to assist employers and employees.
There is no requirement to use the Fair Work Commission’s template, but by using this template the employer will meet the requirements under the award for the written agreement.
Further information about the NES, in particular annual leave entitlements, can be found at www.fairwork.gov.au and in the Fair Work Ombudsman’s Annual leave fact sheet and National Employment Standards fact sheet.
Modern awards containing the new cashing out annual leave clause
- Aboriginal Community Controlled Health Services Award 2010
- Aged Care Award 2010
- Air Pilots Award 2010
- Aircraft Cabin Crew Award 2010
- Airline Operations—Ground Staff Award 2010
- Airport Employees Award 2010
- Alpine Resorts Award 2010
- Aluminium Industry Award 2010
- Ambulance and Patient Transport Industry Award 2010
- Amusement, Events and Recreation Award 2010
- Animal Care and Veterinary Services Award 2010
- Aquaculture Industry Award 2010
- Architects Award 2010
- Asphalt Industry Award 2010
- Banking, Finance and Insurance Award 2010
- Black Coal Mining Industry Award 2010
- Book Industry Award 2010
- Broadcasting and Recorded Entertainment Award 2010
- Building and Construction General On-site Award 2010
- Business Equipment Award 2010
- Car Parking Award 2010
- Cement and Lime Award 2010
- Cemetery Industry Award 2010
- Children’s Services Award 2010
- Cleaning Services Award 2010
- Clerks—Private Sector Award 2010
- Coal Export Terminals Award 2010
- Commercial Sales Award 2010
- Concrete Products Award 2010
- Contract Call Centre Award 2010
- Corrections and Detention (Private Sector) Award 2010
- Cotton Ginning Award 2010
- Dredging Industry Award 2010
- Dry Cleaning and Laundry Industry Award 2010
- Educational Services (Post-Secondary Education) Award 2010
- Educational Services (Schools) General Staff Award 2010
- Electrical Power Industry Award 2010
- Electrical, Electronic and Communications Contracting Award 2010
- Fast Food Industry Award 2010
- Fire Fighting Industry Award 2010
- Fitness Industry Award 2010
- Food, Beverage and Tobacco Manufacturing Award 2010
- Funeral Industry Award 2010
- Gardening and Landscaping Services Award 2010
- Gas Industry Award 2010
- General Retail Industry Award 2010
- Graphic Arts, Printing and Publishing Award 2010
- Hair and Beauty Industry Award 2010
- Health Professionals and Support Services Award 2010
- Horse and Greyhound Training Award 2010
- Horticulture Award 2010
- Hospitality Industry (General) Award 2010
- Hydrocarbons Field Geologists Award 2010
- Hydrocarbons Industry (Upstream) Award 2010
- Joinery and Building Trades Award 2010
- Journalists Published Media Award 2010
- Labour Market Assistance Industry Award 2010
- Legal Services Award 2010
- Live Performance Award 2010
- Local Government Industry Award 2010
- Mannequins and Models Award 2010
- Manufacturing and Associated Industries and Occupations Award 2010
- Marine Tourism and Charter Vessels Award 2010
- Marine Towage Award 2010
- Maritime Offshore Oil and Gas Award 2010
- Market and Social Research Award 2010
- Meat Industry Award 2010
- Medical Practitioners Award 2010
- Mining Industry Award 2010
- Miscellaneous Award 2010
- Mobile Crane Hiring Award 2010
- Nursery Award 2010
- Nurses Award 2010
- Oil Refining and Manufacturing Award 2010
- Passenger Vehicle Transportation Award 2010
- Pastoral Award 2010
- Pest Control Industry Award 2010
- Pharmaceutical Industry Award 2010
- Pharmacy Industry Award 2010
- Plumbing and Fire Sprinklers Award 2010
- Port Authorities Award 2010
- Ports, Harbours and Enclosed Water Vessels Award 2010
- Poultry Processing Award 2010
- Premixed Concrete Award 2010
- Professional Diving Industry (Industrial) Award 2010
- Professional Diving Industry (Recreational) Award 2010
- Professional Employees Award 2010
- Quarrying Award 2010
- Racing Clubs Events Award 2010
- Racing Industry Ground Maintenance Award 2010
- Rail Industry Award 2010
- Real Estate Industry Award 2010
- Registered and Licensed Clubs Award 2010
- Restaurant Industry Award 2010
- Road Transport (Long Distance Operations) Award 2010
- Road Transport and Distribution Award 2010
- Salt Industry Award 2010
- Seafood Processing Award 2010
- Seagoing Industry Award 2010
- Security Services Industry Award 2010
- Silviculture Award 2010
- Social, Community, Home Care and Disability Services Industry Award 2010
- Sporting Organisations Award 2010
- State Government Agencies Award 2010
- Stevedoring Industry Award 2010
- Storage Services and Wholesale Award 2010
- Sugar Industry Award 2010
- Supported Employment Services Award 2010
- Surveying Award 2010
- Telecommunications Services Award 2010
- Textile, Clothing, Footwear and Associated Industries Award 2010
- Timber Industry Award 2010
- Transport (Cash in Transit) Award 2010
- Travelling Shows Award 2010
- Vehicle Manufacturing, Repair, Services and Retail Award 2010
- Waste Management Award 2010
- Water Industry Award 2010
- Wine Industry Award 2010
- Wool Storage, Sampling and Testing Award 2010
[1] An employee is entitled to an extra week’s leave if a modern award or enterprise agreement applies to them and defines them as a shiftworker for the purposes of the NES. Award/agreement-free employees are shiftworkers for these purposes if they meet the requirements of s.87(3)–(5) of the Fair Work Act 2009.
Updated time
Last updated
05 December 2018
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