Employee requests for leave or to change working arrangements

Once a small business has employees, those employees are entitled to take various kinds of leave. Employees are also entitled to seek changes to the way they work. It is vitally important that those requests are lawfully managed and recorded.

1. Managing employee requests

An important part of running a small business is managing requests from your employees with respect to:

· taking leave;

· seeking ‘flexible working arrangements’; and

· changing their employment status.

Owners need to be aware of the following issues when responding to such requests, especially when you are under a legal obligation to do so.

2. Annual leave

Annual leave starts accruing for full-time or part-time employees from the time that their employment begins. Any unused annual leave rolls over from year to year and must be paid to the employee in a lump sum on cessation of employment.

Full-time or part-time employees accrue 4 weeks of paid annual leave per annum, based on their ordinary hours of work. Whereas, casual employees are not entitled to annual leave.

The Fair Work Ombudsmen’s Leave Calculator is a useful tool to calculate an employee’s leave.

It is important that as an employer you make it clear to employees how and when they can request annual leave. Requests for leave can only be rejected where there are reasonable grounds to do so. However, an employee’s award or agreement may allow you to direct an employee to take leave at certain times, such as where an employee has accrued an excessive amount of annual leave or over the annual New Year period.

3. Personal / carer’s leave

Full-time employees are entitled to 10 days of paid personal / carer’s leave per year, while part-time employees accrue this entitlement on a pro-rata basis depending on their ordinary hours of work. The leave accrues from the time that the employee’s employment commences. Personal leave rolls over each year but is not paid out on termination of employment.

Personal / carer’s leave can be used either when an employee is sick/injured or if they need to provide care or support for an immediate family or household member or assist in an unexpected emergency affecting the member. Casual employees do not receive paid personal / carer’s leave. However, casual employees are able to takeup to two days of unpaid carer’s leave per occasion.

As an employer, you can request evidence from your employees at the time they use their personal / carer’s leave. This is generally in the form of medical certificates or statutory declarations. An award or registered agreement may specify when an employee is required to give evidence and the form of such evidence.

4. Other types of leave

Importantly, employees who have, or adopt, a child are entitled to 12 months unpaid parental leave. In order to qualify for that leave, a number of requirements must be satisfied, including that the employee must have worked with the business for at least 12 months, provide 10 weeks’ notice , reconfirm their dates with 4 weeks’ notice and provide evidence (if you request it). Note this unpaid parental leave entitlement is separate from any Government funded Paid Parental Leave or employer paid parental leave scheme.

Other statutory leave an employee may request includes:

· compassionate leave;

· family and domestic violence leave;

· community service leave; and

· long service leave.

It is important to check any applicable awards or registered agreements as they may contain additional leave requirements above those set by the National Employment Standards.

It is crucial to keep current records of each employee’s leave entitlements. If annual leave has been “cashed out” instead of taken (which is permitted in some circumstances), keep a copy of the stipulating agreement, a record of the payment made, the date of the payment and the amount of leave cashed out.

If the employee is under an award and you have agreed for an employee to take annual leave in advance, you must keep a copy of the agreement expressing the amount of leave taken and the day it begins. It is much more difficult to do this years later when there may be a disagreement about leave that has been taken or is owed.

5. Flexible working arrangements

Certain eligible employees who have worked in a business for 12 months may be entitled to request a ‘flexible working arrangement’. This can also be an opportunity for the employer to show understanding of an employee’s personal circumstances, boost morale and increase staff retention.

An employee may be legally entitled to request changes in their working arrangements if they are a parent, carer, have a disability, aged 55 or older, experiencing violence from a member of the employee’s family or are providing care to someone who is experiencing violence. The employee may request changes to:

· their hours of work;

· the way they work; and

· where they work.

If you receive this kind of request, you must provide a written response within 21 days, setting out whether the request is approved or refused. If the employee is covered by an award, you may have additional obligations such as the requirement to have a discussion with the employee and try to reach an agreement before you respond in writing.

An employer is only able to refuse this kind of request where there are ‘reasonable business grounds’ to do so. Those reasons must be included in your written response. Reasonable business grounds for refusing a request may include:

· that the new working arrangement would be too costly for the employer;

· it would be impractical to change the working arrangements of other employees; or

· there would be a significant loss in productivity or efficiency.

6. Casual conversion

Amendments to the Fair Work Act (2009) (Cth) (FWA) have changed the obligations of employers with respect to an employee converting from casual to full-time or part-time employment. Although the FWA does not require small businesses with 15 employees or less to offer conversion into permanent roles, an eligible casual employee of a small business can request to convert to permanent employment at any time on or after their 12 month anniversary.

Casual employees are eligible to request casual conversion if:

· they have been employed for at least 12 months;

· have worked a regular pattern of hours for the last six months; and

· could continue working these hours as a full-time or part-time employee without significant changes.

An employee is ineligible for conversion if in the last six months they have refused an offer of a permanent role from their employer, they have been notified that casual conversion will not be offered due to reasonable grounds, or their employer has refused another request due to reasonable grounds.

“Reasonable grounds” may include that, in the next 12 months, the employee’s hours will be significantly reduced, their position won’t exist or their days or times of work will significantly change in circumstances where the changes will not align with the employee’s availability.

Employers must respond in writing to a casual conversion request from an employee within 21 days and notify the employee of the result. If the request is refused, an employer must disclose their reasoning in the written response. If the request is accepted, the start day for permanent employment will be the first day of the first full pay period after the employer has written to their employee.

Although you are not required under the FWA to offer casual conversion within your small business, it is important that you effectively manage requests for conversion.

With thanks to Nick Noonan, employment law specialist, of Henry William Lawyers for his assistance in preparing this article.