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Annual Leave: paid or unpaid?

Hi and thanks for your great question on annual leave…this one does cause some confusion. 

First of all, well done to old mate for making the commitment to finish his studies. Congratulations also go out to you as an employer. You’ll reap positive returns from your willingness in demonstrating workplace flexibility; not only from this individual but as word gets around to other members of your team…and the outside world. I bang on a bit about the value of employee engagement but it is really is one thing that separates a great company from the wannabees. 

Short answer to your question?  No. Annual leave does not accrue while an employee is on a period of unpaid leave or on an unauthorised absence.

HR nerds read on:

Annual leave (also known as holiday pay) allows an employee to be paid while having time off from work. The entitlement comes from the National Employment Standards, with Section 87 of the Fair Work Act 2009 defining the entitlement.

Annual leave accumulates from the first day of employment. The leave accumulates incrementally throughout the the year and any unused leave will roll over from year to year.

Annual leave accumulates when an employee is on:

  • paid leave such as paid annual leave and paid sick and carer’s leave
  • community service leave including jury duty
  • long service leave.

It does not accumulate when the employee is on:

  • unpaid annual leave
  • unpaid sick/carer’s leave
  • unpaid parental leave
  • unpaid family and domestic violence leave.

Simple, right? And so is taking the first step to making your business (and people) smarter, stronger and faster in 2021. How? Bare Bones Consulting can show you. We know HR back to front and can demonstrate how the right structure, policies and procedures can take you to the next level as an Employer of Choice.  And at a value for money price. Don’t tell me you don’t need that in today’s environment. 

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