Can employees refuse to take annual leave when on JobKeeper?

In May 2020, the Fair Work Commission was asked to consider whether the refusal by an employee to take annual leave at the request of her employer was reasonable, testing the recent JobKeeper amendments to the Fair Work Act 2009.

A part time Village Roadshow Theme Parks employee who had 9.3 weeks of accrued annual leave and 8.6 weeks of long service leave was asked to take one day of annual leave per week throughout the JobKeeper payment period.

The employee refused, stating that she had a number of holidays planned for 2020 and 2021, although formal approval for leave had not been granted by the employer. Importantly, the employer’s leave policy required that “all Leave must be approved by the Manager before it is guaranteed. You should not book flights etc until you have received your Manager’s approval. … VRTP reserves the right to decline leave requests when it does not suit the operational needs of the business.” It further states “Leave can only be requested within 12 months”.

The Commission determined that the employee’s refusal to take annual leave was unreasonable and in doing so rejected the argument that the JobKeeper amendments should only be available to smaller employers.

The Commission observed that the employee showed little to no regard towards the employer’s request to employees to assist in reducing annual leave liabilities during times where the business has been unable to operate. The Commission described the refusal as “excessive, and disappointingly vitriolic, when regard is had to the fact that she has paid for some of the proposed holidays without first obtaining formal approval.”

The decision indicates that the Commission may take a sympathetic view towards employers who are working to protect the viability of their business and, in doing so, the job security of their employees, through COVID-19.

Given the further Stage 3 restrictions currently in place in Melbourne, it is likely that employers will continue to need to make difficult decisions in the best interests of the business and staff and that questions regarding seeking to reduce accrued leave balances will continue to arise.

If you require advice relating to the new JobKeeper provisions, Heather Richardson can assist.