Who doesn’t love annual leave!  Whether it’s sitting by a pool sipping cocktails, skiing down a mountain rejoicing in a fresh dusting of snow or maybe it’s exploring a new country and absorbing all that the local culture has to offer.  Without doubt, holidays are vital to both physical and mental wellbeing and of course you want your employees to be happy and healthy. 

Most of the time, it’s a no brainer to approve leave, but there are times when it’s not convenient to the business so can you refuse?

First up, annual leave is outlined under the National Employment Standards as a right that all full and part time employees have to take, accruing at 4 weeks per year (pro rata for part time workers) and eligible shift workers earn five weeks per year.

There is no minimum or maximum amount of leave an employee can take each year.  If someone chooses not to take a break, so be it but depending on what you allow for in your annual leave policy, others may choose to save up some of their time and take off for an eight-week overseas jaunt.

Genuine, sound business reason

In short, yes you can refuse an annual leave request, but the Fair Work Commission has confirmed that you must have a genuine, sound business reason.  And what constitutes a genuine, sound business reason you ask….

• The period over which the employee wants to take leave, including existing approved leave requests or planned absences of other employees,
• The operational requirements of the business during the leave period,
• Whether the leave would cause a detriment to the business; and
• Whether the employee gave reasonable notice

Request for annual leave

Cedric has popped an annual leave form on your desk, but he wants two weeks off during the busiest time of year and you really need all hands-on deck.  Do you refuse the request?

If you have a block out period that correlates with Cedric’s leave timing and you have a clear and well communicated policy in place, you could decline the request.  But if Cedric is wanting to travel because his only daughter is getting married in Italy and she has plans for the whole family to celebrate and enjoy some of the sights together, is it really a wise decision to refuse the request? You need to overlay the decision with some understanding and refusing a request without knowing the reason for the request could foster poor morale and deep resentments within your team.

But what If Cedric simply wants to slip over to Bali because at 62 years young he’s taken up big wave surfing? You weigh it up – does it suit the operational needs of the business?  Realistically, there should be flexibility in big wave surfing dates but there isn’t when it comes to your busy period and you really need him so you can refuse the request.  But have a chat with him as to why you can’t approve leave for that period and work with him to find alternate dates that suit you both. 

In situations such as these, communication and a well written policy will save a lot of heart ache!

Blackout period

Now here comes Josie with an annual leave request.  It’s not in the black out period and it doesn’t conflict with anyone else in her team so you will still have boots on the ground to cover her work in her absence.  But she doesn’t have any accrued leave up her sleeve.  You have the option to grant her unpaid leave, or let her entitlements fall into a negative leave balance which can be risky as she could resign without having rebuilt the accrual and you may struggle to recoup the cost of the paid leave.  You also have no obligation to approve leave in this situation and can absolutely refuse the request.

Recommendation

Everyone needs a break from the daily grind of work and we recommend that all employees, including owners and business leaders, make use of their leave entitlements to get away from it all.  Research shows that holidays relieve stress, boost immunity and improve overall health, improves motivation and productivity and can even improve staff retention.

Encourage your team to access their leave entitlements keeping in mind that if you have a shutdown period, there are new rules around forcing employees to take unpaid leave, so you need to account for this when approving leave. Ensure you have a robust policy in place that clearly outlines block out and shutdown periods as well as the required process for annual leave applications.  And finally, remember that if you are going to refuse a leave request, you need a genuine, sound business reason.

As always, the experienced and knowledgeable team at HR Staff n’ Stuff is always here to answer any questions you have so contact us if you have any questions on how to manage a challenging annual leave situation!