Section 94 — Fair Work Act 2009 (Cth)

Agreements to cash out paid annual leave

(1) An employer and an award/agreement free employee may agree to the employee cashing out a particular amount of the employee’s accrued paid annual leave.

(2) The employer and the employee must not agree to the employee cashing out an amount of paid annual leave if the agreement would result in the employee’s remaining accrued entitlement to paid annual leave being less than 4 weeks.

(3) Each agreement to cash out a particular amount of paid annual leave must be a separate agreement in writing.

(4) The employer must pay the employee at least the full amount that would have been payable to the employee had the employee taken the leave that the employee has forgone.

Requirements to take paid annual leave

(5) An employer may require an award/agreement free employee to take a period of paid annual leave, but only if the requirement is reasonable.

Note: A requirement to take paid annual leave may be reasonable if, for example:

(a) the employee has accrued an excessive amount of paid annual leave; or

(b) the employer’s enterprise is being shut down for a period (for example, between Christmas and New Year).

Agreements about taking paid annual leave

(6) An employer and an award/agreement free employee may agree on when and how paid annual leave may be taken by the employee.

Note: Matters that could be agreed include, for example, the following:

(a) that paid annual leave may be taken in advance of accrual;

(b) that paid annual leave must be taken within a fixed period of time after it is accrued;

(c) the form of application for paid annual leave;

(d) that a specified period of notice must be given before taking paid annual leave.

Related sections

• s 91 — Transfer of employment situations that affect entitlement to payment for period of untaken paid annual leave
• s 92 — Paid annual leave must not be cashed out except in accordance with permitted cashing out terms
• s 93 — Modern awards and enterprise agreements may include terms relating to cashing out and taking paid annual leave
• s 95 — Subdivision applies to employees other than casual employees
• s 96 — Entitlement to paid personal/carer’s leave
• s 97 — Taking paid personal/carer’s leave

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