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Leave Policy in Australia: An Easy Guide for US Companies

Is your US-based company hiring Australian talent? This easy guide will go over the leave policy in Australia and help ensure your compliance with local leave laws like the Fair Work Act 2009.

Sydney Opera House at night

Jade MacRury

Published on July 26, 2022

Leave policy in Australia 🏖️

The leave policy in Australia, as set out by the Fair Work Act 2009 and its subsequent amendments, is comprehensive and ensures a safe working environment for all.Within the Act, the following awards workers various rights, entitlements, and benefits:The NES, for example, grants employees 11 minimum employment entitlements. Of these, six are about the types of leaves that employees could benefit from.Note: For more info on the general employment laws you must comply with when hiring contractors and employees in Australia, check out our easy guide on Australian employment laws.

Leave entitlements of workers based in Australia 🍹

The following leaves are available to qualified employees in Australia:
  • Annual leave,
  • Personal leave,
  • Compassionate and bereavement leave,
  • Parental leave,
  • Public holidays leave,
  • Rostered day off,
  • Jury duty leave,
  • Military leave,
  • Community service leave,
  • Long service leave,
  • Family and domestic violence leave,
  • Work-related injury leave,
  • Birthday leave,
  • Religious and cultural holiday leave (e.g., floating holiday),
  • Special leave,
  • Moving leave,
Some of these leaves are enshrined in Australian law, while others are benefits offered by employers to attract talent. We'll discuss all these leaves in greater detail in the following subsections.Note: Remember that leave entitlement changes depending on a number of factors, such as a worker's employment classification, length of service, employment industry, and physical location.For example, a permanent private sector employee living in the Australian Capital Territory will have vastly different leave entitlements than a weekly hire plumbing apprentice in Victoria.

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Annual leave policy in Australia

The annual leave policy in Australia became standardized in 1970 and allowed employees to be paid while not working.Currently, full-time and permanent employees in Australia benefit from four weeks of paid annual leave. The amount of leave available to an employee is pro-rated for part-timers (i.e., calculated in proportion to how many hours they work per week).Of course, different industries are covered by different modern awards and enterprise agreements that could potentially increase your employees' yearly annual leave entitlement. For example, full-time shift workers enjoy five weeks instead of four per year.Annual leaves in Australia are separate from public holidays.

How annual leave accrues

Annual leave accrues based on the number of hours your employees work in a given year and start on the day they begin working for you, even if they are on probation, doing community service, on jury duty, or taking another kind of paid leave.On the other hand, annual leave doesn't accrue when your employee is on the Paid Parental Leave Scheme, on unpaid leave – unless they're doing community service, or if they are stood down.Note: Employees are asked to stand down from work due to circumstances that are outside the employer’s control; this is unpaid.Similar to other countries like South Africa, unused annual leave in Australia can carry over to the following year. If your employee resigns and they haven't taken all of the annual leave they're entitled to, you will have to pay them out.
Green Island, Australia
Photo by Jodi Nelson / Unsplash

Taking annual leave

In Australia, annual leave can be taken when an employee makes an annual leave request, or when an employer directs the employee to take them.The latter is not nearly as common as the former and often happens when the employee has an excessive amount of leave (e.g., when they have leave that carried over from last year plus the leave they're entitled to this year), or the company is closing.Employees can request to take their annual leave one day at a time or consecutively, at any time (e.g., even during their probation period), so long as they don't exceed the amount of annual leave they've accrued.That said, there is no requirement to approve all leave applications. If the dates conflict with business interests, you can decline a request and/or propose an alternative time. Of course, the grounds for leave refusal must not be unreasonable.In some cases, your employees may be eligible to take leave before annual leave has been accrued, or take payment in lieu of a day off.Note: Annual leaves are not the same as public holidays. For example, if your employee is taking three days off and a public holiday is celebrated on the second day, then they have only taken two days of annual leave (i.e., not three days).

Annual leave pay

Employees are entitled to their "current base pay rate for all hours of leave taken," excluding extra payments (e.g., overtime rates) and including leave loading (i.e., if specific awards and enterprise agreements govern your employee).
Purple sunset on Cairns Esplanade, Australia
Photo by Thomas Chen / Unsplash

Taking annual leave

In Australia, annual leave can be taken when an employee makes an annual leave request, or when an employer directs the employee to take them.The latter is not nearly as common as the former and often happens when the employee has an excessive amount of leave (e.g., when they have leave that carried over from last year plus the leave they're entitled to this year), or the company is closing.Employees can request to take their annual leave one day at a time or consecutively, at any time (e.g., even during their probation period), so long as they don't exceed the amount of annual leave they've accrued.That said, there is no requirement to approve all leave applications. If the dates conflict with business interests, you can decline a request and/or propose an alternative time. Of course, the grounds for leave refusal must not be unreasonable.In some cases, your employees may be eligible to take leave before annual leave has been accrued, or take payment in lieu of a day off.Note: Annual leaves are not the same as public holidays. For example, if your employee is taking three days off and a public holiday is celebrated on the second day, then they have only taken two days of annual leave (i.e., not three days).

Annual leave pay

Employees are entitled to their "current base pay rate for all hours of leave taken," excluding extra payments (e.g., overtime rates) and including leave loading (i.e., if specific awards and enterprise agreements govern your employee).

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Personal leave policy in Australia

Employees in Australia are also entitled to personal leave, sometimes called sick leave or carer's leave. This type of leave grants them time to deal with personal illness or injury, caring responsibilities, and/or family emergencies.Again, employees' leave entitlement can vary:
  • Full-time employee: 10 days per year of paid personal leave,
  • Part-time employee: 10 days per year of pro-rated paid personal leave
  • Casual employee or independent contractor: No paid entitlement but can access unpaid leave.
Note: You can ask employees for a medical certificate to confirm why they took personal leave. Ensure that you have an internal policy in place that governs this process.Please contact the Fair Work Ombudsman if your employee needs to take an extended period of sick leave or carer's leave.

Compassionate and bereavement leave policy in Australia

According to the Fair Work Act 2009, qualified employees can take two days of paid compassionate leave (paid at the employee's base rate excluding extra payment) if:
  • A member of their immediate family or household dies, or contracts or develops a life-threatening illness or injury,
  • A baby in their immediate family or household is stillborn,
  • They have a miscarriage, or
  • Their current spouse or de facto partner has a miscarriage.
Mother and daughter in Byron Bay, Australia
Photo by Kate Darmody / Unsplash
In Australia, the term "immediate family" includes the following:
  • Spouse or former spouse,
  • De facto partner or former de facto partner,
  • Child,
  • Parent,
  • Grandparent,
  • Grandchild,
  • Sibling,
  • The immediate family of the employee's spouse or de facto partner (or former spouse or de facto partner),
  • Step-relations (for example, step-parent and step-child), and
  • Adoptive relations.
Employees can take compassionate leave for a close relative (i.e., not an immediate family member) with the employer's approval.Compassionate leave is available as "a single continuous two-day period, two separate periods of 1 day each, or any separate periods as agreed with the employer."Unlike annual leaves, compassionate leave does not accrue and cannot be encashed.Employees can take this type of leave at any time, provided they give notice (which may be given even after the leave has started). In fact, when they need to take compassionate leave, employees that are already on other types of leave (e.g., sick leave) can replace the other leave with compassionate leave.Note: Just like when employees take personal leave, an employer can make a reasonable request for evidence about the reason for the compassionate leave (e.g., a medical certificate from a hospital stating that an immediate family member has a terminal illness). Without evidence, an employee may be refused compassionate leave.
Young child in pigtails in Tasmania, Australia
Photo by Lee Culkin / Unsplash

Paid parental leave policy in Australia

Qualified employees are eligible for 18 weeks of paid parental leave if they meet specific criteria, such as if they:
  • Are the primary carer of a newborn or newly adopted child,
  • Are not working during their Paid Parental Leave (with certain exceptions),
  • Meet the work test, and
  • Have registered or applied to register their child's birth with the state or territory birth registry if they're a newborn.
Paid parental leave covers maternity leave, paternity and partner leave, adoption leave, and no safe job leave. It is governed at the federal, state, and territory levels.

No safe job leave

A paid no safe job leave refers to the type of leave taken when an employer is fit for work but unable to do so due to conditions that make the working environment unsafe. For example, a pregnant woman may have to take a no safe job leave if she's working in a factory where she is required to lift heavy objects.

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Public holiday leave policy in Australia

According to the Fair Work Ombudsman, all employees are entitled to take a day off on a public holiday, during which they will receive holiday pay. A public holiday leave could be paid or unpaid, depending on the employee classification. Casual employees, for example, are not entitled to paid holiday leave, whereas full-time employees are.An employer can ask their employee to come to work on a public holiday, but the latter has the option to refuse based on reasonable grounds. Full-time and part-time employees who don't work on a public holiday can expect to be "paid their minimum pay rate for the ordinary hours they would usually work on that day." On the other hand, some employees must be paid a penalty rate higher than their minimum pay rate.The federal government recognizes the following public holidays a year:
  • New Year's Day
  • Australia Day
  • Good Friday
  • Easter Monday
  • Anzac Day
  • Labor Day
  • Queen's Birthday
  • Christmas Day
  • Boxing Day
Depending on which state or territory your employee primarily resides in, they may be eligible for more holiday leave.For more information, watch the video below:

Rostered day off (RDO)

A rostered day off (RDO) is a paid day of leave that's very common in certain industries, such as:
  • Building and construction,
  • Clerical,
  • Contract cleaning,
  • Hair and beauty,
  • Health support services,
  • Horticulture,
  • Hospitality,
  • Manufacturing,
  • Real estate,
  • Retail,
  • Road transport,
  • Security,
  • Social, community, disability, and home care services, and
  • Storage services and wholesale.
An RDO refers to a day in a roster period that an employee doesn't have to work. It could be paid or unpaid depending on either awards or agreements.

Jury duty leave policy in Australia

Jury duty leave refers to both jury selection and jury duty. Qualified employees get paid a certain amount (varies across states and territories) plus "makeup pay" for the first ten days. State and territory laws can be more generous. For more information on jury payment terms, please look at the relevant sites below:

Long service leave policy in Australia

In Australia, employees who have worked from five to ten years with the same company are entitled to paid leave that's different from other types of leave. The long service leave entitlements vary based on location:
  • Australian Capital Territory (ACT),
  • New South Wales (NSW),
  • Northern Territory (NT),
  • Queensland (QLD),
  • South Australia (SA),
  • Tasmania (TAS),
  • Victoria (VIC), and
  • Western Australia (WA).

Unpaid leave entitlements in Australia

In addition to the paid leaves above, workers also enjoy unpaid leave entitlements in Australia. Some of these are parental leave, community service leave, family & domestic leave, and work-related injury leave.

Leave without pay rules in Australia

Leave without pay rules in Australia are enshrined in the Fair Work Act 2009, which enables employees to take needed days off without requiring employers to compensate for these days.Some of these unpaid leaves are versions of the paid leaves above, such as unpaid parental leave. Others are a completely different type of leave. We'll go over them in the next sections.
Ladies relaxing by the ocean, Little Bay, Australia
Photo by Elmer Cañas / Unsplash

Unpaid parental leave

Qualified employees can take 52 weeks of unpaid parental leave, provided they were employed by their employer for the last 12 months, and the primary caregiver. This is in addition to the 18 weeks of paid leave discussed above.

Pre-adoption leave

Employees who want to adopt a child sometimes need to attend interviews or examinations to determine their suitability as adoptive parents. In cases like this, they may be eligible to take unpaid pre-adoption leave.

Adoption leave

Like employees who are taking regular parental leave, adoptive parents (i.e., those who adopt a child under 16 years old) are also entitled to 52 weeks of unpaid parental leave. They must similarly meet the criteria above to qualify.

Special maternity leave

In addition to regular maternity leave, unpaid special maternity leave is granted to employees who have a pregnancy-related illness, a miscarriage, or an abortion.An employee who experiences a stillbirth may be entitled to unpaid parental or compassionate leave.

Community service leave policy in Australia

There are two types of community service leaves in Australia: jury duty and voluntary emergency management activities. The former is paid while the latter is unpaid.An employee is only eligible for this type of leave if they meet the following eligibility criteria:
  • The activity involves dealing with an emergency or natural disaster,
  • The employee engages in the activity on a voluntary basis,
  • The employee was either requested to engage in an activity, or it would be reasonable to expect that such a request would have been made if circumstances had permitted, and
  • The employee is a member of, or has a member-like association with a recognized emergency management body.
For more information on community service leave for voluntary emergency management activities, please watch the video below:

Family and domestic violence leave policy in Australia

Family and domestic violence leave is currently unpaid, but the Fair Work Commission "issued a provisional decision to include paid family and domestic violence leave in awards for permanent employees" in May 2022. The National Employment Standards (NES) grant all employees five days of family and domestic violence leave each year.

Military leave policy in Australia

The military leave policy in Australia refers to the leaves allotted for defense reservists, "an essential component of the Navy, Army and Air Force" who could "be deployed on operations overseas or in Australia." Reservists need to take leave to undergo training or assist in combat operations, peacekeeping operations, and humanitarian and emergency relief in times of natural disasters.While this is unpaid leave, many companies do opt to pay their employees.

Legal Disclaimer:

The information contained in this site is provided for informational purposes only, and should not be construed as legal advice on any subject matter.

Non-statutory leave policies in Australia

On top of the statutory leave policies stipulated in the Fair Work Act 2009, employers offer other leaves either as an employee benefit or because the law has not (yet) provided a specific leave for it.Some of these leaves are:
  • Work-related injury leave,
  • Birthday leave, and
  • Religious and cultural holidays leave.

Work-related injury leave policy in Australia

There is no separate work-related injury leave policy in Australia as such. Employees who are injured or become sick because of work can take the following leaves, depending on eligibility:
  • Unpaid parental leave,
  • Annual leave,
  • Personal leave, and
  • Long service leave.
Birthday donut with sprinkles and candles, Sunshine Coast, Australia
Photo by Social Cut / Unsplash

Birthday leave policy in Australia

Some employers offer their employees birthday leave. Often this paid day off needs to be taken on the date of birth, but not always.

Religious and cultural holidays leave

There is no legal requirement for employers to give additional leave for religious and cultural holidays that aren't covered by federal, state, and territory laws. Employees who need such leave often use other leave entitlements, such as annual leave.Some employers, such as PwC Australia, offer floating public holidays, allowing employees to work on government-mandated public holidays so they can celebrate days that are a better cultural or religious fit.

Special leave

Special leave is a type of leave that employers offer their employees for certain circumstances. The University of Sydney, for example, offers a special leave for staff members who are "receiving Australian citizenship, which includes attendance for an interview with the Department of Home Affairs and the citizenship ceremony."

Moving leave

Some employers offer their employees a one-day paid moving leave when they move house.

Pay and entitlement changes during coronavirus 🦠

On July 18, 2022, the Australian government extended the Pandemic Leave Disaster Payment, given to all eligible employees who don't have other leave entitlements and are unable to earn an income due to COVID-19.For more information on the Pandemic Leave Disaster Payment, please watch this video:
Four days later, the Australian government re-inserted the two weeks' unpaid pandemic leave in the following modern awards:
  • Aboriginal and Torres Strait Islander Health Services Award,
  • Aged Care Award,
  • Ambulance and Patient Transport Industry Award,
  • Health Professionals and Support Services Award,
  • Supported Employment Services Award, and
  • Social, Community, Home Care and Disability Services Industry Award.
Qualified employees are entitled to this leave if they're negatively impacted by COVID-19.

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