An employer must ensure that staff do not accrue too much annual leave for several reasons. The first is the financial burden of unused annual leave. If an employee leaves their job then the company must pay this out to them. The second is from a managerial perspective. There is the possibility that an employee intending to leave will want to take it all at once. This puts the manager in a difficult position as someone will have to cover their position for a long time. Operational difficulties can arise if multiple employees want to take their leave all at once. Workplace health and safety is the last reason and it is the toughest. No manager wants the staff to suffer and burn out from big workloads without a break. In addition to this, going too long without a break results in decreased efficiency and morale in the workplace if employees begin to be sluggish.
There are always two differing perspectives and situations. From an employee’s perspective, they may be saving their annual leave to spend more time with family, saving for a holiday or just having a mental getaway. It is also typical of employees wanting to be paid out the annual leave when they depart from their existing company. Employees are legally allowed to take as much leave as they prefer at once. It is in the best interest of the employee to negotiate leave rather than sporadically walking out. This is to allow the company to secure plans when the employee is on leave regarding business operations. The two circumstances whereby employers can force employees to take leave include when an employee has taken excess leave and if the company closes over the holidays.
What is ‘Excess Leave’?
An employee’s registered agreement is where excess leave should be addressed. This agreement typically defines how much leave is too much or excess, or it may not even address it at all. If the agreement does not address this, then an employee who has accrued excess leave must be forced out in a ‘reasonable direction’. A reasonable direction takes into account:
- The operations of the business and employee needs
- Arrangements of the entity
- Predetermined arrangements with staff
- How much notice was given for leave
Enforcing Staff To Take Leave During A Business Shut Down
A business shutdown involves a temporary closure of the company at certain times of the year for exactly over the Christmas holidays. During The Covid-19 pandemic over thousands of businesses have made the difficult decision to stand down employees, but shutdown is different. Once again, an employee’s registered agreement or modern award depends on whether or not an employer can force leave during a business shut down.
Forcing employees to take leave may deteriorate and loosen relationships with staff, this is why it should be the last resort. Meetings about how accrued leave affects business operations and the dynamics of the business will give employees key information allowing an equal understanding.