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LWOP over Christmas: are public holidays paid?

This question was recently sent to our Workplace Advice Line.
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LWOP over Christmas: are public holidays paid?

LWOP over Christmas: are public holidays paid?

20 November 2020

By Marise Donnolley

Do we have to pay employees for public holidays if they took leave without pay over Christmas?

This question was recently sent to our Workplace Advice Line.

Q Some of our employees took leave without pay over the Christmas/New Year period. They've queried why they weren't paid for the public holidays. We don't think they are entitled to payment as they requested the time off without pay.

Should employees be paid for public holidays during a period of leave without pay?

A An employee’s entitlement to a paid public holiday that falls during a period of leave without pay has been a source of conjecture for years and has not been the subject of judicial review.

The Fair Work Act does not appear to clarify this point, although s116 states that if an employee does not have ordinary hours of work on the day the public holiday falls, the employee is not entitled to payment for the holiday.

To avoid this potential problem, an employer could, as a condition of consenting to an employee’s request for leave without pay, alter the employee’s ordinary hours to zero for the period of leave without pay. This would mean the employee has no ordinary hours that would fall on the day any public holiday occurs during leave without pay.


Unauthorised absence

What happens if an absence before or after a public holiday is unauthorised?

There is nothing in the Fair Work Act to suggest that an employee forfeits their entitlement to payment for a public holiday if he/she takes an unauthorised absence on the working day before or after a public holiday.

While such a term was common in awards and agreements some years ago, the right of an employer to deduct payment for a public holiday in this circumstance was removed with the start of the Fair Work Act on 1 January 2010.

While an unauthorised absence before or after a public holiday may be grounds for instigating disciplinary action, an employee would still be entitled to payment for a public holiday that falls on a day the employee is normally rostered to work.


Accrual of paid leave

Under the Fair Work Act, an employee does not accrue paid annual leave or personal/carer’s leave during a period of leave without pay.

It should be noted that an unpaid authorised absence does not break an employee’s continuity of service with an employer (ie service prior to leave without pay still counts towards total service).

The bottom line: It is assumed there is no payment to an employee for a public holiday that falls during a period of leave without pay as the employee’s ordinary hours have, by agreement, been reduced to zero for the duration of the absence.
 

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