By Catherine Ngo Senior Editor and Content Writer, My Business

Answer: Employers can refuse annual leave requests, but only for reasonable grounds. 

What is considered "reasonable" may be outlined in the Modern Award and applicable to the employee, enterprise agreements, individual flexibility arrangements, policies, or procedures.

Otherwise, there is no set formula for declining annual leave requests. It is assessed on a "case-by-case" basis, considering individual and operational circumstances.

Employers should carefully evaluate all relevant factors before deciding and not be too quick to decline a request. Ultimately, employers should aim to be flexible or meet halfway unless accommodating the request would significantly disrupt business operations.

Factors to Consider

1. Reasonableness of Leave Notice: Check if the employee has provided reasonable notice per the award, enterprise agreement, or employer policies.

2. Operational Needs: Consider the business's operational needs during the requested leave period. For instance, in the hospitality industry, declining requests during festive seasons or in accounting near the end of the financial year might be reasonable.

3. Employee Role: Assess if the employee's role is critical and requires their presence during specific periods.

4. Duration of Leave: Consider the length of leave requested. Short periods (one or two days) with minimal business impact might be difficult to deny, even with short notice.

These factors serve as a guide in determining the overall reasonableness of refusing a leave request.

Balancing Workplace Safety Risks with Annual Leave Requests

  • Employers must consider their WHS duties when evaluating annual leave requests.
  • Even if there's a legitimate reason to deny a request, an employee who needs a break due to overwork or exhaustion must be allowed to take it.
  • Denying a request in such circumstances could lead to employee injury or harm and potentially breach the employer's WHS duties.

Recommendations for Employers

  • Implement a Leave Policy outlining the process, requirements, and restrictions for taking leave.
  • Communicate the Leave Policy to employees through newsletters, meetings, etc.
  • Encourage employees to plan their leave early, especially during busy periods.
  • Foster a supportive work environment where employees coordinate their leave plans to ensure smooth operations.

Can you cancel pre-approved annual leave?

Employers and employees may seek to cancel previously approved annual leave in specific situations. For instance, an employer might need to cancel an employee's leave due to an unusually busy period requiring more staff. 

However, cancelling leave must adhere to the principle of reasonableness. Double-check the Modern Awards, enterprise agreement, employment contract, and workplace policies, which may contain additional guidelines regarding cancelling approved annual leave. 

Employer-Initiated Cancellation of Annual Leave

Before cancelling an employee's pre-approved leave, employers should consider the following factors:

1. Potential Financial Impact on the Employee: Assess if the employee has incurred any expenses in anticipation of their leave, such as deposits made for planned activities.

2. Notice Period: Consider the amount of notice provided to the employee regarding the cancellation. Adequate notice allows the employee to adjust their plans and minimise any disruptions.

Employee-Initiated Cancellation of Annual Leave

When an employee requests to cancel their pre-approved annual leave, employers should not unreasonably deny the request. Employers are encouraged to consider the employee's personal circumstances and provide flexibility where possible.

What if an employee is sick on their annual leave day? 

There are several ways to handle this scenario.

  • The employee can use personal leave. This is the most common option, as it allows the employee to stay home and recover. The original annual leave entry will need to be updated to personal leave. The same rules apply for taking personal leave in that the employee may be required to produce evidence to cover their absence.
  • The employee can reschedule their annual leave day(s) subject to the business's operational needs.

Catherine Ngo Senior Editor and Content Writer, My Business

Catherine is passionate about unravelling the latest news and insights to help entrepreneurs, small business owners and employers.