We love annual leave. Those 20 glorious days a year every fulltime employee gets to unwind, go on holiday, or have a little staycation (yes, that's a thing). But you all know someone, or you are someone, who just can't take a break, and these eager beavers end up with massive leave accruals. Thankfully, as part of its four yearly review of modern awards, the Fair Work Commission has loosened the shackles to give employers and their workaholic employees more flexibility when it comes to annual leave.

Unlike their awardfree counterparts, modern award covered employees are prohibited from cashing out their annual leave unless the applicable modern award expressly allows for it. The problem is, many awards are silent on cashing out annual leave. Meaning that even if an award covered employee genuinely wants to trade their annual leave for cash, they're out of luck.

Fortunately, that's about to change. Almost all modern awards will be amended to include an annual leave cash out term. However, the FWC has included the following conditions as part of the amendments:

  • only two weeks' annual leave can be cashed out in 12 months
  • the employee still needs to have four weeks' annual leave left after the cash out and
  • the cash out agreement needs to be in writing.

In addition to the freedom to cash out annual leave, the FWC also agreed to amend most modern awards to allow annual leave to be taken in advance and to assist with managing excessive leave accruals. Regarding the latter, employers will be able to direct most modern award employees, subject to particular conditions, to take annual leave when employees have more than eight weeks (or 10 weeks for shift workers) accrued. Equally, most modern award covered employees will gain a limited right to require employers to grant annual leave when they have excessive accruals.

We're yet to be told when these amendments commence.