When you hire a permanent or casual employee, you must provide certain rights to them under the Fair Work Act 2009 (Cth). Specifically, the law creates leave entitlements for permanent employees. This 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 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 you must extend to your 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:
|
| Long service leave* | ✓ | ✓ |
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 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 it before they accrue it. You can also allow them to take unpaid annual leave. However, employees are not legally entitled to these two leave forms. Accordingly, you may allow or refuse negative leave and unpaid leave requests at your 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.
Continue reading this article below the formPersonal/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 yearly.
An employee can only take personal/carer’s 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.
Suppose an employee is unfit for work or has a carer’s responsibilities, but they have run out of paid personal/carer’s leave. In this case, 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 based on 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.
Whether it’s your first hire or your fiftieth, this guide will help you understand the moving parts behind building a high-performing team.
What About Part-Time Employees?
In August 2019, the Federal Court handed down a decision that 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 proportionate to their ordinary work hours.
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.
For example, an employee would be entitled to take two days of compassionate leave if their father died. Then, if their child were 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. Accordingly, 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 wages 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 and 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, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
Parental leave is unpaid, so you have no obligation to pay the employee their wage during the period of leave. However, you may choose to create a scheme where employees are paid part or all of their wages during the leave period.
Employees are entitled to two days of compassionate leave for each incident where an immediate family member or household member dies, contracts an illness or sustains a life-threatening injury.
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