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Businesses in Australia are required by law to grant their employees paid annual leave, as well as paid and unpaid leave for other reasons such as becoming parents, caring for sick relatives, bereavement, or community service. If you're hiring employees for the first time, you need to be aware of your legal obligations.
Here's a detailed look at company leave policy and how to craft one for your business.
What is a leave policy?
An annual leave policy sets out the paid and unpaid time off work that all company are entitled to take. In Australia, the National Employment Standards (NES) establish the minimum entitlements that all employees should receive. An employment contract can use awards, enterprise agreements or other registered agreements to set out leave allowances, but it cannot provide less than the NES.
When should I use a leave policy?
A company's leave policy should be included in employment contracts, as annual leave begins to accumulate from the first day of employment. Details of the entitlements, such as holiday pay and parental leave policy, should also be included in the employee handbook for reference.
What does a leave policy include?
Company annual leave policy includes the terms under which employees can take paid and unpaid time away from their job. It also includes the procedure for how employees should notify their employer they want to use their leave.
Leave policy covers the main types of paid and unpaid leave, which according to the Fair Work Ombudsman are:
- Annual, or holiday, leave. All full-time and part-time employees, except casual employees, are entitled to at least four weeks of annual leave, based on their ordinary hours of work. Shift workers are entitled to receive five weeks. Annual leave accumulates even while an employee is in a probation period. Leave accumulates during the year and unused leave will carry over to the next year.
- Parental leave. If they have worked for their employer for at least 12 months, employees are entitled to 12 months of unpaid leave when their child is born or adopted. The Australian government pays new parents for up to 18 weeks through its Parental Leave Pay scheme.
- Personal/carer's leave. Leave to care for an immediate family or household member is taken from an employee's balance of 10 days of annual sick leave. Personal leave accumulates in the same way as annual leave. In addition, all employees are entitled to two days of unpaid carer's leave.
- Compassionate leave. Employees can receive two days of leave if an immediate family or household member dies or has a life-threatening illness or injury. Full-time and part-time employees are entitled to paid leave and casual employees are entitled to unpaid leave.
- Family and domestic violence leave. All employees are entitled to five days of unpaid leave each year if they need to do something to deal with the impact of violence against themselves or a close relative. The leave resets each year and does not accumulate. Some employers choose to provide paid leave.
- Community service leave. Employees can take community service leave for activities like voluntary emergency management activities and jury duty. Community service leave is unpaid, unless it is jury service.
- Long service leave. State and territory laws set out how long a person has to be working for the same employer and how much leave they are entitled to receive.
- Public holidays. An employer can reasonably request that an employee works for their base pay on a public holiday. Public holidays vary depending on the state or territory.
How effective is a leave policy?
A well-defined leave policy that complies with government legislation makes it clear for employees and managers what employees are entitled to, and minimises the chance of an employment dispute.
Do I need a lawyer for a leave policy?
It is advisable to have an employment lawyer draft or review your company's leave policy to make sure that your employment contract complies with the minimum legal requirements set out in the National Employment Standards (NES).
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How do I write a leave policy?
Your company's leave policy should be clearly written so that employees can easily understand what they are entitled to. Include details of the paid and unpaid entitlements for each type of leave, how they accumulate and long they have to work for your company to receive them. The policy should be tailored to your company's needs and the type of workers you employ, whether full-time, part-time or casual employees.
Where to get free legal documents and templates like a leave policy.
- Lawpath. Lawpath is an online legal resource for small businesses and entrepreneurs. Its range of documents include a leave policy, although you have to sign up for an account to gain access.
- Wonder.Legal. Wonder.Legal offers more than 140 legal document templates you can customise and download for a one-time fee. It provides a template for an employee handbook that includes a leave policy. You can access the document for free, however you'll need to pay $79.99 to customise and download it.
- Fair Work. The Fair Work Ombudsman, Australia's industrial relations tribunal, provides a range of free downloadable templates for businesses to use.
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