Is it ever ok (or legal) to make employees to take their annual leave? HC talks to an employment lawyer about the legalities of annual leave.
While holidays usually signal a welcome relief during the working year, HR managers should be aware that not all employees like to take mandatory leave when they are told to do so.
Employers need to be mindful that employees can dispute the issue of forced holidays with the Fair Work Commission, says employment lawyer Josh Bornstein.
Technically, employees own their holidays – but employers can set conditions on this and force employees to take holidays if this is deemed “fair and reasonable”, Borstein, a principal at Maurice Blackburn, told AFR.
However, he cautions that each Fair Work Commission judge or commissioner may have a different view on what is a reasonable demand, or a reasonable case for exception.
"It can be a tricky issue for people juggling their leave and trying to ensure they get a proper break," Bornstein told AFR.
HR professionals can avoid legal pitfalls by setting out leave arrangements in the employee’s award or workplace agreement.
“If they are not covered by these arrangements, an employer can force the issue if it is deemed fair,” Australian Human Resources Institute board member Rhonda Brighton-Hall told AFR.
Reasonable employers must ensure they give staff plenty of notice ahead of shutdown periods, and workers should approach their manager early if they don’t agree to take leave during this time, Brighton-Hall said.
Employers need to ensure workers are taking breaks for the sake of workplace health and safety, and also so their leave balance sheets don’t turn into a financial liability.
Since leave is paid at the rate earned by the employee at the time they take it, rather than at the rate they were paid when they earned it, leave balances grow in value over time and can leave employers facing a big pay-out.
Good employers should remember that the purpose of leave is for the benefit of employees – not for the employer, says group managing director of consultancy ThoughtWorks, Angela Ferguson.
"People have lives and have pressures outside of work,” Ferguson told AFR.
She says the Christmas shutdown period at ThoughtWorks usually takes up around three days of staff annual leave, however the company is flexible and allows some teams to work through.
The company usually schedules training courses for the Christmas-New Year break, and staff use the time to do pro-bono or low-urgency work, Ferguson says.
"The opportunity cost is minimal," said Ms Ferguson.
On the flip side, companies such as Netflix offer their staff unlimited paid holiday leave, as long as they complete all their work in the process.
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