Under the National Employment Standards (NES) all employees covered by the national workplace relations system other than casual employees are entitled to a minimum of four weeks’ paid annual leave each year, or five weeks’ for certain shiftworkers.
There are 51 modern awards containing clauses which require an employer to pay an employee for a period of annual leave before the leave commences. For example, clause 34.4(a) of the Food, Beverage and Tobacco Manufacturing Award 2010 provides:
“34.4 Payment for period of annual leave
a. Instead of the base rate of pay as referred to in s.90(1) of the Act, an employee under this award, before going on annual leave, must be paid the wages they would have received in respect of the ordinary hours the employee would have worked had the employee not been on leave during the relevant period.”
Following recent decisions of the Fair Work Commission, the following clause has been added to those 51 awards:
“Electronic funds transfer (EFT) payment of annual leave
Despite anything else in this clause, an employee paid by electronic funds transfer (EFT) may be paid in accordance with their usual pay cycle while on paid annual leave.”
The effect of this clause is that when employees are paid by EFT, they may be paid in accordance with their usual pay cycle while on annual leave, rather than being paid before the leave commences.
There is no change to the requirement under the 51 awards to pay an employee for a period of annual leave before the leave commences if the employee is paid by cash or cheque.
Further information about the NES, in particular annual leave entitlements, can be found at www.fairwork.gov.au and in the Fair Work Ombudsman’s Annual leave fact sheet and National Employment Standards fact sheet.
 An employee is entitled to an extra week’s leave if a modern award or enterprise agreement applies to them and defines them as a shiftworker for the purposes of the NES. Award/agreement-free employees are shiftworkers for these purposes if they meet the requirements of s.87(3)–(5) of the Fair Work Act 2009.