When you hire a permanent or casual employee, you are required to extend certain rights to them under the Fair Work Act 2009 (Cth). Specifically, the law creates leave entitlements for permanent employees, which allows them to take days off work for certain purposes. It also creates some entitlements for casual employees, although they are fewer and unpaid. As an employer, you must be familiar with these entitlements to avoid breaching the law and to reduce the risk of a dispute with your employees. This article: 

  • summarises employees’ leave entitlements; and 
  • outlines your responsibility to comply with employment law.

Employees’ Leave Entitlements

The table below outlines the leave entitlements that you must extend to you employees.

Permanent Casual
Paid annual leave
Paid personal/carer’s leave
Unpaid carer’s leave
Compassionate leave

 

Paid

 

Unpaid

Unpaid family and domestic violence leave
Community service leave

 

Unpaid except for jury service

 

There is no entitlement to payment under the National Employment Standards, but state/territory laws may provide for it

Unpaid parental leave

 

As long as the employee has completed 12 months of continuous service

 

Unless the employee:

  • has completed 12 months of continuous service;
  • is a long term casual; and
  • but for the birth/adoption, they would have had a reasonable expectation of continuing employment on a regular and systematic basis.
Long service leave*

Unlike other forms of leave, which are governed by the Fair Work Act 2009 (Cth), long service leave is governed by state or territory legislation. As a starting point, all states and territories entitle casuals to long service leave in certain circumstances. However, you should consider this entitlement on a case-by-case basis because each various exclusions exist in each state and territory.

Annual Leave

A full-time employee is entitled to four weeks of annual leave per year. Their annual leave accrues progressively throughout the year. This means that they are only entitled to: 

  • four weeks of leave when they have completed 12 months of continuous service; or
  • two weeks when they have completed six months of continuous service. 

Annual leave also accumulates from year-to-year, meaning it does not reset to zero if an employee does not use their leave in a given year.

As an employer, you may allow your employees to take negative annual leave, by enabling them to take leave before they have accrued it. You can also allow them to take unpaid annual leave. However, employees are not legally entitled to these two forms of leave, so you may choose to allow or refuse it at your own discretion. 

You may only direct employees to take annual leave in certain circumstances. If your worker is not employed under a modern award, you may ask them to take leave if your direction is reasonable. 

For example, it may be reasonable for you to direct employees to take annual leave during a Christmas shutdown period. However, this is subject to each particular set of facts. 

If employees are covered by an award, you may only direct them to take annual leave in certain circumstances

For example, you can ask them to take their leave if they have accrued excessive leave as defined in the award.

You should carefully consider each award before making any such direction.

Personal/Carer’s Leave

A full-time employee is entitled to 10 days of personal/carer’s leave per year. As is the case for annual leave, personal/carer’s leave accrues progressively throughout the year and accumulates from year-to-year. 

An employee can only take annual leave:

  • because they are not fit for work, due to personal illness or injury;
  • to provide care to an immediate family member or a household member, who requires care because they are sick or injured; or 
  • because of an unexpected emergency.

An immediate family member is defined very broadly, including an employee’s:

  • spouse, former spouse, de facto partner or former de facto partner; 
  • child;
  • parent;
  • grandparent;
  • grandchild; or
  • sibling.

This also includes any child, parent, grandparent, grandchild or sibling of the employee’s spouse, former spouse, de facto partner or former de facto partner of the employee.

If an employee is not fit for work or has carer’s responsibilities, but they have run out of paid personal/carer’s leave, they may request to take unpaid leave. You can grant or refuse this request at your discretion. However, you may be at risk of discriminating against employees if you do not allow them to take unpaid leave on the basis of their:

  • physical or mental disability; or
  • carer’s responsibility.

You are entitled to ask employees for evidence when they take personal/carer’s leave, such as a medical certificate.

What About Part-Time Employees?

In August 2019, the Federal Court handed down a decision which enabled employees to accrue one day of personal/carer’s leave every 5.2 weeks, regardless of how much they have worked. The implication was that part-time employees were entitled to 10 days of leave every year, rather than a pro-rated amount.

However, the High Court overturned this decision in August 2020. This clarified that you must calculate personal/carer’s leave for part-time employees on a pro-rata basis. Therefore, they will receive leave in proportion to the ordinary hours that they work.

Compassionate Leave

In addition to personal/carer’s leave, all employees can take two days of compassionate leave. This allows employees to take time off work when an immediate family member or a household member:

  • contracts an illness or sustains an injury that poses a serious threat to their life; or 
  • dies.

It is important to highlight that employees are entitled to two days of compassionate leave for each incident that arises. 

For example, an employee would be entitled to take two days of compassionate leave if their father died. Then, if their child was diagnosed with a terminal illness a few weeks later, they would receive an additional two days of compassionate leave.

This differs from personal/carer’s leave and annual leave, which extend a certain number of days each year.

Parental Leave

If an employee has worked for you for 12 months, they are entitled to 12 months of unpaid parental leave. The law outlines detailed conditions as to when and how an employee can take parental leave, such as:

  • how long before the birth/adoption of a child an employee can take leave;
  • when an employee is entitled to take leave for the adoption of a child;
  • when an employee can extend the period of leave; and
  • what happens if the pregnancy ends.

Parental leave is unpaid. This means that you have no obligation to pay the employee their wage during the period of leave. However, as an employer, you may choose to create a scheme where employees are paid part or all of their wage during the period of leave.

Regardless of your internal policies, your employee may be eligible to receive payments from the government under the federal government’s Paid Parental Leave Scheme. The employee should enquire directly with Services Australia to receive this benefit.

Key Takeaways

Permanent employees are entitled to take: 

  • annual leave;
  • personal/carer’s leave;
  • compassionate leave;
  • parental leave; and
  • community service leave. 

Casual employees may also be eligible to receive these benefits under some circumstances. The law sets out the amount and accrual of leave, as well as when you must pay it. The provisions about parental leave in particular are quite prescriptive. If you have any questions about leave entitlements and related disputes, contact LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.

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