The latest Government figures show Australian workers have amassed 129 million days of annual leave, worth $40bn in wages – a timely reminder for employers to encourage employees to redeem their accumulated annual leave with Christmas around the corner.
The managing director of a government campaign aimed at bringing awareness to the implications of stockpiling annual leave entitlements said there are no winners in the case of untaken leave. “Stockpiled leave can be a huge financial burden for employers with accumulated leave sitting on the balance sheet. Then there is employee productivity, health and stress levels, which are all negatively impacted when taking leave is habitually avoided.”
In addition, figures revealed in a global study by travel website Expedia show that Australia is the fifth most holiday-deprived nation, and Australian workers are reluctant to take all of their leave due to the uncertain economic outlook and uncertainty over how their employer will react to their request. Health experts say encouraging employees to use their annual leave entitlements makes good business sense. Dr Peter Cotton, Medibank Health Solutions director of psychology services, said that not taking leave can often lead to increased stress levels both in professional and personal life. “Employees who don’t take annual leave can often display higher levels of depression or anxiety-related stress among other symptoms, compared with those who do take holidays. Even taking short breaks for just a few days can lead to an improvement in a person’s mental, emotional and physical wellbeing,” Cotton said.
According to the survey results, the most common reasons employees were reluctant to take their annual leave were:
Separation anxiety from work (14%)
Negative reactions from employers (13%)
Getting paid extra for not taking holidays (9%)
Believing their employer was unsupportive of annual leave (26%)
Can an employee forfeit annual leave?
Under the Fair Work Act 2009, an employee cannot forfeit their annual leave entitlements.
However, it is often senior managers who amass the highest number of annual leave, and because these positions are more inclined to be award/agreement-free, there are additional considerations provided under law.
Section 94 of the Fair Work Act says that an employer may require an award/agreement-free employee to take a period of paid annual leave, but only if the request is reasonable. A legislative note states that a requirement to take annual leave may be reasonable if the employee has accrued an excessive amount of annual leave. Although the act does not define ‘excessive’, typically, an award/agreement-free employee may cash out annual leave provided a balance of at least 4 weeks’ annual leave remains.