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  • Writer's pictureCDG Chartered Accounting

Annual Leave, Long Service Leave, Personal Leave; What does it all Mean?

As a business owner, it is inevitable that you stumble across employee entitlements, one of the most notable being employee leaves and their types. There are many different types of leave, provided for a number of reasons, and these are all covered in the National Employment Standards (NES). Not allowing an employee leave when they are entitled to it, or not paying out unused leave when the employee exits their employment, are two common and significant breaches of workplace law. These breaches can end in litigated disputes and can also involve penalties from the Fair Work Ombudsman.

Given the number of types of leave, I have summarised them in a list below:

- Parental leave and related entitlements

- Annual Leave

- Personal/Carer’s Leave

- Compassionate Leave

- Unpaid family and domestic violence leave

- Community service leave

- Long service leave (covered in detail by state governments and in a separate post)

- Public Holidays (paid or unpaid)

- Flexible working arrangements on request

Recall that the NES are a set of minimum standards that an employer must adhere to, and the above does not cover all circumstances and is not intended to be an exhaustive list.

Knowing which of the above an employee is entitled to is first determined by their employment structure. For instance, a casual employee is only entitled to unpaid carer’s leave, unpaid compassionate leave, unpaid family, possibly long service leave (in a separate post) and domestic violence leave and community service leave. Additionally, they are entitled to flexible working arrangements and parental leave if they have been regularly and systematically employed for 12 months or more.

Given the complexities of annual leave, personal leave and long service leave, they are written about in more detail in separate posts. Other non-standard forms of leave often create a large headache for employers, simply because they are unaware of them! For instance, compassionate leave is allowed when a member of the employee’s immediate family or household dies or develops a live-threatening illness or injury. An immediate family member is defined as the employee’s spouse (or former spouse), child, parent, grandparent, grandchild, sibling, or any of these combinations for the employee’s spouse. In these circumstances, an employee is allowed two days of compassionate leave, or two individual one day periods of compassionate leave, at a minimum. Full-time and part-time employees must be paid their ordinary rate for this leave, whilst casuals take the leave unpaid.

Domestic violence leave applies to the employee in the same way, where any of the above relationships are causing the employee harm or fear, or the abuse and threats are seeking to coerce or control the employee, the employee is entitled to 5 days of unpaid domestic violence leave per year.

Community service leave is another form of leave that is not always encountered. An employee is allowed this leave for either jury duty, or for voluntary emergency management activities. Jurors are paid a rate by the Government for their time, but it is little known that the employer must pay a ‘make-up’ pay to reimburse the employee up to their ordinary rate (should the Government payment be short) if the employee is full-time or part-time. This applies only for the first 10 days of Jury Duty. Voluntary emergency management is different and is unpaid, and also uncapped. The employee is entitled to as much leave as they are able to prove in a reasonable circumstance. The activity must be with a recognised emergency management body, and the employee must give notice as soon as possible and also provide the employer with an expected period of leave notice.

Employee leave is a complex area, and there are so many things you need to know, both as an employee and an employer. The next posts will cover in-depth some guidelines around personal, annual and long service leave, as they are the most common forms, and also the most expensive. It is vital that employers are aware of these entitlements, both during a prospective employment, and also when calculating the employee pay rate, as hidden costs must always be factored in!

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