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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.
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.
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.
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:
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.
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).
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.
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