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Annual leave

  • Multiple awards
  • Standard
  • Lack of clarity
  • A recommendation
  • The formula
  • Conclusion


  • Each state and national award creates misadvise and openness for related parties to give incorrect advice, agitation of employees and employers alike.


  • Standard is in place to improve delivery of clarity in relation to the issue of Annual leave.  The Standard is simple, however it could be seen as misleading in relation to changed pay rates.


  • Clarity in the instance that an employee, paid $12/hr two wks ago, now paid $20/hr should be entitled to their accrued Annual leave on a pro-rata basis is now not clear.


  • As amount paid is the real test to entitlement, could the focus be changed to a simple calculation based upon how much someone has been paid?


  • Formula

Annual leave payment entitlement:
Total gross pay / 13 = Annual leave gross payment entitlement.


  • Conclusion.  This simple formula caters for an infinite number of changes in pay rate, overtime and leave without pay.  Sick days, special leave and all other changes should be seen as compliant activities in relation to Annual leave assessment.The only trade off would be paying someone who hasn’t been paid to date.  Considering the universality of this formula, it would save a lot of heated debate between employees, their employers, trade union rep’s and advisory personnel.  The 4wks promised every year would be preserved and entitlements up to that point accurately accrued.  Issues of ability to take leave, preservation, cashing out etc would be issues separate to the Annual leave payment entitlement formula.

Robert Lakelin, PIVITOL
May, 2009


Employer groups have warned us the new legislation will give more power to unions and collective bargaining.

Collective bargaining generally refers to the negotiation of a collective industrial agreement between the employer and employees and often the union on behalf of the employees,” explains Ierodiaconou. “These agreements usually cover a particular enterprise and contain detailed terms and conditions governing employment, such as redundancy pay, notice of termination, pay rates, classification scales, and some types of leave, such as family flexibility leave.

“The Fair Work Bill requires employers and employees to bargain in good faith. Once the employer and employees agree to the terms of the enterprise agreement, and it is approved by the Australian Industrial Relations Commission (which will be renamed Fair Work Australia), then the agreement will be in effect until its expiry date, which will be a maximum of four years under the Fair Work Bill. The agreement continues to operate past its expiry date unless it is terminated or replaced by another agreement.

“However, it is unlawful for any industrial action to occur before the agreement expires.”

It is more common for larger businesses to have enterprise agreements than it is for smaller businesses, which usually operate on individual contracts.

“The fundamental framework regarding unions’ right to enter workplaces under the Work Choices laws has not substantially changed in the new legislation,” says Ierodiaconou. “There are some changes that expand the type of workplaces that unions can enter. However, unions can’t just enter a workplace at any time, there are rules that they need to comply with.”



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