Would you allow your employees to donate their annual leave?

by Janie Smith26 May 2014

Under a new law, French workers can anonymously donate their annual leave to colleagues who need time off to look after seriously ill children.

The idea for the law came from the experience of a worker at a water-bottling plant, whose bosses allowed his colleagues to give him 170 days of their leave to care for his 11-year-old son who had cancer.

The United States also allows workers to donate their annual leave to another employee who has a personal or family medical emergency and has used all of their available paid leave, under the Voluntary Leave Transfer Program.

But there’s no legal provision for Australian workers to do the same. Should we follow suit?

Currently, it’s not lawfully possible to make an agreement with employees to cash out annual leave, unless the employee is covered by a modern award that allows cashing out – but even then, a strict criteria must be met.

While donating leave is a lovely idea, there are many potential risks around legislating for such action, Clayton Utz partner Hedy Cray told HC Online.

She said the commentary around the passing of the French law highlighted the “difficult human nature” side of such a scheme, including the potential for bullying and persecution of employees, who may chose not to donate leave.   

Apart from the current legislative impediments under the Fair Work Act restrictions on cashing out, if such a scheme was introduced legislatively, managing it highlights the difficulties of supporting all employees’ choices and personal circumstances in a workplace.

“You could see an anonymous donation scheme like this being very successful in a large workforce where there’s an large pool of people available to donate and support a fellow co-worker in need, but in a much smaller workforce, anonymity may be fairly illusory.

“That anonymity issue may give rise to expectation and questions about why didn't you donate. Everyone’s personal circumstances are different and whilst it really is a beautiful thing to see that people want to do that, the risks of legislating and authorising it can also backfire in circumstances where the voluntariness and the anonymity may not work.”

Equally, if a pool of donated leave was created for employees in need, issues could also arise around who was given priority and how the scheme was administered by the employer, if leave was available for some, but not others.

“The priority issues between whose unwell child or pressing domestic necessity is more important than somebody else’s, may cause disparate decisions to be made, with consequent legal risks,” said Cray.

Choosing one employee over another to receive leave could give rise to discrimination claims, if their child’s illness or family circumstances may be viewed as less deserving or if insufficient leave was donated. 

“While the [French] bill was passed, the objectors to it do highlight that difficultly, which replicates in Australia, around disability discrimination, victimisation, peer pressure, bullying and harassment and would place obligations on employers to monitor and manage such a scheme if introduced,” said Cray.   

Should Australian employers allow workers to donate their annual leave to colleagues?


  • by Mark 26/05/2014 11:15:15 AM

    Very valid points raised. What id someone donated their hours, then needed it and asked for it back off he person who they gave it too.

  • by Maree 26/05/2014 11:53:27 AM

    my previous employer allowed employees to cash out annual leave (Allowed under EBA / Award) to donate to organsiatiosn such as red cross, ses etc. It was used mainly during periods of national disaster (Black saturday was an example) The cashed out a component that was then dontated to organisations rather than individuals. The scheme was voluntary and confidential. The only people who knew were the person completing a cash out form and payroll/finance

  • by Ashley 26/05/2014 1:38:13 PM

    My current employer allows employees to donate personal leave to fellow employees in times of hardship. Approval for the ability to dontate is provided from Senior Management (per situation) before any any leave can change hands.

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