Australia : Millions of Australians can now 'cash out' their annual leave
Millions of Australians can now cash out annual leave and take the money instead after new reforms came into force this week.
The industrial umpire has inserted clauses into almost all of Australia's 122
workplace awards, which allow employees to strike agreements with their bosses to cash out portions of leave, as long as they still have at least four weeks remaining after doing so.
Under the changes, workers will only be able to cash out two weeks of annual leave every 12 months. Employers will also receive greater powers to force staff who have excessive leave balances to take paid leave.
The new clauses affect nearly 2 million Australians covered by modern awards – the basic pay and conditions safety nets for most occupations. The changes were introduced this week, and come after the Fair Work Commission last year delivered the findings of a sweeping inquiry into annual leave provisions.
Many other employees who are covered by enterprise agreements, rather than modern awards, are already able to cash out portions of their leave.
Business leaders have praised the Fair Work Commission's reform as a welcome move towards more flexible employment arrangements, but the Australian Council of Trade Unions fears it could lead to an erosion of vital workplace conditions.
"The union movement is concerned that the decision by the Fair Work Commission supports the idea that annual leave need not be taken and should be treated as a commodity rather than an entitlement designed to maintain the health and wellbeing of the workforce," ACTU secretary Dave Oliver said.
"The fact that employees tend not to take the annual leave they have accrued indicates that employers are not creating work environments in which employees feel secure taking the leave that they have earnt."
The nation's biggest business group – the Australian Chamber of Commerce and Industry – said the Fair Work Commission's annual leave changes showed it was prepared to listen to the needs of business.
"While employers did not get everything they wanted, the reasonable changes will help businesses better manage annual leave," ACCI chief James Pearson said.
"The proceedings highlighted the lack of flexibility in the modern award system."
Mr Pearson said the employer group worked hard to secure the annual leave changes. He said the next test of the Fair Work Commission's capacity to "adapt to the needs of the modern economy" would be whether it accepts employer applications to vary weekend penalty rates in the retail, pharmacy and hospitality sectors.
"Employer representatives have put a comprehensive evidence-based case for change to the Fair Work Commission," Mr Pearson said.
"The evidence demonstrates how reducing penalty rates, particularly on Sundays, can improve job opportunities."
The Fair Work Commission's much-anticipated ruling, on whether to reduce weekend penalty rates in seven industries' awards, is likely to be handed down in September, ACCI says.
Unions have strongly fought against employer calls for the reduction of existing loadings of up to 200 per cent on Sundays and 250 per cent on public holidays.