Annual Leave Accrual

sp3ctr41 on 12/07/2021 - 18:05
Last edited 12/07/2021 - 19:02 by 1 other user

I have an international friend working full-time for a company and I think he's getting taken advantage of, but I just want to confirm with everyone here.

He has accumulated 30 days of annual leave, and he accumulated it some time back (several months ago - he wasn't quite at 30, but very close). He then noticed today that his leave is at 30 days and said he wants to take leave because he's not accumulating anymore, this raised some red flags with me so I thought it was a mistake, so I told him to ask HR. This is the response he got:

Company(copying message exactly as it was written)->

Hi XXXX,
Annual leave has a ceiling of 30 days beyond which it will stop accumulating. The accrued leave of 30 days will not lapse if unavailed.
Thanks & Regards

Then I looked at that and told him… okay, can you please reply with the following:

Friend->

Thank you for the information, in that case, can I assume all leave which would have been accrued after 30 days is getting paid out?

Company (copying message exactly as it was written)->

Hi XXXX,
Encashment of leaves happen only when an associate leaves the organization on the remaining annual leaves on Last working day.
Thanks and regards,

Surely this is illegal? It seems that my friend has between 1-2 months of leave unaccounted for. I've been forced to take annual leave before or required to get it cashed out, but I didn't know a company can simply cap it as they see fit.

He is in NSW.

Curious at what others think.

Thanks!

Education & Work

Comments

  • PissLUR on 12/07/2021 - 18:16
    +13

    Surely it's illegal.

  • AdosHouse on 12/07/2021 - 18:21
    +9

    https://www.fairwork.gov.au/tools-and-resources/fact-sheets/…

    Basically he has to keep accumulating leave at 4 weeks a year. He can be forced to use leave if he reaches an excessive level, check his award. Anything less is illegal. Contact Fairwork.

  • holisticboy on 12/07/2021 - 18:23

    Recommend looking at the rules regarding annual leave here: https://www.fairwork.gov.au/tools-and-resources/fact-sheets/… and additionally, some more information about the wage award your friend might be under

    Failing that, you can always get in contact with the fairwork via their phone number here: 13 13 94

  • bargainHunterOz on 12/07/2021 - 18:24

    I know of a few companies with the same policy. They refer it to employee wellbeing and in good intentions, it make sense to kind of force employees to take some time off and give some time to themselves or family if they want to continue earning the leaves for their own wellbing

    • sp3ctr41 on 12/07/2021 - 18:25

      You know of other companies with the same policy of capping annual leave? Forcing annual leave after you have reached a certain point and outright capping it from accruing are entirely different. He wasn't even given an email or other kind of warning that it was going to happen, it just did.

      • colaman on 12/07/2021 - 18:29
        +1

        Yes can force with notice, no can't cap. I asked someone who studied Human Resources and is employed in this area.

      • bargainHunterOz on 12/07/2021 - 19:36
        +1

        Yes, cap as in we had to go on forced leave if a certain amount of leave is accumulated. Some major universities also have the same policy. If the accured leave reaches a certain level in a particular year, the employees are recommanded to take the leave or it will lapse after the end of year.

        • colaman on 12/07/2021 - 23:08

          that is permissible with notice, I meant can't cap and not get any benefit in return (ie paid out, actual leave). The leave wouldn't lapse but would likely be paid out after 30 days at end of year.

    • coffeeinmyveins on 13/07/2021 - 13:10

      I know of a few companies with the same policy. They refer it to employee wellbeing and in good intentions, it make sense to kind of force employees to take some time off and give some time to themselves or family if they want to continue earning the leaves for their own wellbing

      Lol no. They can encourage you to take the leave, this is flat out illegal. They can make you take time off, after it reaches an excessive amount, but they can't negate the hours.

    • whitelie on 13/07/2021 - 15:26

      This is a different policy.
      They're capping it and not forcing the employee to take time off. Work for say 18 months and build up 30 days leave. Don't take any leave after that but don't accrue any more leave…

      Sounds like absolute BS.

  • colaman on 12/07/2021 - 18:25

    no where in fairwork does this state - all info is here - https://www.fairwork.gov.au/leave/annual-leave

    States - The leave accumulates gradually during the year and any unused annual leave will roll over from year to year.

    Can't cap but yes can force to take.

    • slickster on 12/07/2021 - 22:15

      Colaman - couple of things if you could ask your friend would appreciate feedback …

      1. What is considered excessive 5/6/7/8 weeks for a 50 year old with a company for 4/6/8 years is not huge. How is excessive calculated ?

      2. Forced leave - in NSW we are locked down so cannot actually "leave" to go anywhere - how is "forced" framed if business revenue is NOT shut down ?

      3. If employer is hellbent on Forced Leave could you ask to cashout leave as it may rank in priority above forced leave that is excessive ? "It is unlawful for an employer to force (or try to force) an employee to make (or not make) an agreement to cash out annual leave. "

      Not employed under an award or paid any award pay rates.

      Merry lock down to you all, Slick

      • colaman on 12/07/2021 - 23:30

        Asked and this is what they said (think I have interpreted right)

        Your company would have a level that they would consider excessive. Annual leave is a liability to a business as that money has to be put aside for the benefit of the employee and the more employees that have lots of leave saved up, the higher the liability is. Doesn't matter how old you are or how long you have been with a business.

        With forced leave is leave you could look at it 2 ways especially with current circumstances. In current circumstances, you could be asked to take leave for the benefit of the business due to decrease in revenue and it certainly would be better to take leave then to have the business to still require to have that leave liability and then decide that we don't have enough money to keep you on anymore. And then yes, they forced leave with notice such as say over Christmas/New year period and they say that you must take leave over this time or that you have too much leave and need to take it.

        They can't force you to cash out unless there is an agreement and is permissible under your award. (or under fairwork)

  • SF3 on 12/07/2021 - 18:41

    associate leaves the organization

    Sounds like your friend could be in a 457 (based on the words describing such employees), so maybe his employment conditions are different. I’m no expert.

    • sp3ctr41 on 12/07/2021 - 19:14

      I just asked, he is on a 482 visa. Even so, the law isn't differen't because of that

  • Drakesy on 12/07/2021 - 18:42

    If they cap it at 30 they'd need to reimburse him monetarily for the unaccrued days/hours.

    Yes companies can put you on leave management policies if they want you to reduce your leave balance but they can't just stop giving/paying you out your leave entitlements while you still work for them.

    This guy needs to contact fair work stat.

  • sp3ctr41 on 12/07/2021 - 19:10

    Thanks all for the feedback, I saw the fairwork link already but I wasn't sure because I didn't see anything mentioned about capping.

    I've found out HR is based in India, perhaps they don't understand Australian law(surprising because it's not a small company) or perhaps it's a misunderstanding. I've told my friend to send this and we will wait and see:

    Hello,

    Thanks for the response. Can you please inform me how much leave I am owed from when the system stopped counting as it is Australian law that annual leave can't be capped as per this statement:
    "An employee (other than a casual employee) accumulates four weeks of paid annual leave for each year of service with the employer. An employee’s entitlement to annual leave accumulates continuously based on the number of ordinary hours they work." - Link to Fairwork Annual Leave

    • AdosHouse on 12/07/2021 - 19:50
      +4

      Oh FFS, so not only does he need to talk to HR (already painful), but he still has to talk to an Indian call centre. Just can't win. LOL.

    • coffeeinmyveins on 13/07/2021 - 13:11
      +1

      Get fairwork involved mate. they'll sort it out. dealing with a company in india he'll be shafted.

  • DarkOz on 12/07/2021 - 20:08

    Annual leave is your work entitlement. No one can take it from you and in this case capping it. They can force you to take it when it is at an excessive level.

    I think this company is dumb or just playing dumb. Dumb for not knowing how it works or playing dumb for ripping your friend off. I think it’s the latter.

  • Master Bates on 12/07/2021 - 20:57

    A company that is incorporated overseas and employs workers in Australia is a ‘national system employer’ which is bound to observe the Fair Work Act.

    This means that even if an employee of a foreign company is employed under an employment contract governed by the law of another country, all employees of the foreign company based in Australia must receive the minimum pay, entitlements and protections set out in the Fair Work Act.

    Source

  • thatonethere on 12/07/2021 - 21:25

    A lot of places have rec leave balance caps - after which you get a bunch of HR warnings and then you are told "don't come Monday as you are now deemed on leave for X days". Even government departments have it baked into their EA.

    Some more info here https://www.fwc.gov.au/awards-agreements/awards/modern-award…

    • brad1-8tsi on 13/07/2021 - 15:00

      The government trading corporation I work for banks excess leave at your current pay rate when you have exceeded the cap and won't take leave.

      Alternatively you are allowed to sell 2 weeks leave per year back to the company (or purchase 4 weeks).

  • coffeeinmyveins on 13/07/2021 - 13:09
    +1

    This is great. I love it when companies do something so blatantly illegal.

    Your friend will get their AL 100% after they contact fairwork, but they're going to be out of a job because they'll most likely be fired for "unrelated reasons".

    Two good things:

    1) The 1-2 months of payout will tide him over to find a new job
    2) If he gets fired then he'll get a nice big settlement for unfair dismissal

    win win win.

    Name and shame the company.

    • ozprash on 13/07/2021 - 17:09

      Looks like he's on 482 visa, and will just end up being sent back to home country unless deemed super important by the client company.
      Whichever company he's working for, there should be a leave policy defined and available on their portal. He should read it very carefully if any such reference to caps has been made.

      FWIW, I had a friend who was deputed here with a big Indian MNC service provider on 457/482 visa, and he had actually accumulated 93 days annual leave over 6 years. So having an annual leave cap is certainly not common even on those visas.

  • brad1-8tsi on 13/07/2021 - 14:57

    What does his award, enterprise agreement or contract say?

    Even the 30 day bit sounds dodgy as you usually accrue 20 days per year.

    Maybe he should take some leave?

  • freefall101 on 13/07/2021 - 17:10

    They can force you to take leave, they cannot just stop accruing it though.

  • Vote for Pedro on 24/07/2022 - 12:31

    Is it any surprise that non unionised workplaces get treated like this.

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