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Can you cancel annual leave that has been approved?

This question was recently sent to our Workplace Advice Line.
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Can you cancel annual leave that has been approved?

Can you cancel annual leave that has been approved?

14 December 2020

An employee who is about to go on four weeks' annual leave has resigned. Can we cancel her leave and make her work out the notice period?

This question was recently sent to our Workplace Advice Line.

Q An employee has resigned and given one month’s notice as required under her contract of employment. She had already arranged four weeks’ annual leave prior to handing in her resignation. This means the entire period of the notice will be spent on annual leave.

In our organisation, employees are expected to work out the notice period (be it termination or resignation) to allow them to engage in a proper handover of duties.

The company wants to cancel the employee’s annual leave so she can work out the notice period. Is cancelling annual leave permitted under these circumstances?

A Under the National Employment Standards, an employer would not have the unilateral right to withdraw a pre-approved period of annual leave except with the agreement of the employee. The employer could ask the employee to cancel their annual leave (or part of the period of the leave) and return to work so as to complete the notice period however the employee is not obliged to do so.

In this case, the employee may have valid reasons for refusing to return to work from annual leave. For example, she may point out that she has complied with the request for annual leave as required under the company’s leave policy and it was approved. She may have made arrangements related to taking annual leave in good faith. This may include travel arrangements such as booked flights and accommodation, and any cancellation could result in financial penalties on the employee.

While this circumstance has not been the subject of judicial review, an employer’s direction to return to work from annual leave in this situation could be viewed as unreasonable and contravene the Fair Work Act (s88).


Absence during notice period

An employee who has been given notice by an employer, or has given notice to an employer, is required to work out the notice, except where prevented from attending due to illness or injury or where an absence is authorised by the employer.

When notice is given by an employer, an employee who is absent from work without reasonable cause during the notice period may have wages docked for the period of the absence. However, the length of the notice period is not extended by the unauthorised absence; the date of termination would remain unchanged.

An employer may accept an application by an employee to take annual leave during a notice period, and cannot unreasonably refuse to authorise annual leave. Also, the employer cannot direct the employee to take annual leave.

Paid absences of annual leave, personal/carer’s leave, public holidays, long service leave, job search entitlement, jury service, compassionate leave, etc., would count as part of the period of notice.

The bottom line: An employer cannot withdraw an employee’s pre-approved annual leave if it coincides with a period of notice of termination. Leave can only be cancelled by agreement of the employee.
 

Workplace Advice Line

Got a question about HR management or employment law? Call our Workplace Advice Line on 1300 575 394.
 

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