Cashing out annual leave

August 3, 2016

VACC Industrial Relations has received numerous enquiries from members regarding the progress of this matter in the four-year review of modern awards. The Fair Work Commission has now issued final award determinations to introduce encashment of accrued annual leave for award employees in most modern awards. This includes the Vehicle Manufacturing Repair, Services and Retail Award 2010, and the Clerks – Private Sector Award 2010.

These determinations will take effect from the first full pay period commencing on or after 29 July 2016.

Encashment of annual leave for award staff will be restricted to a maximum of two weeks in any period of 12 months. Both the employer and the employee must agree to encashment in writing and each period of encashment must be the subject of a separate written agreement.

The employee must retain a minimum amount of four weeks accrued annual leave after encashment.

The amount of encashment must equal the amount which would have been paid to an employee if the employee had actually taken the accrued annual leave. This means that annual leave loading must be included in the amount encashed.

There is a prescribed form of agreement that must be completed to comply with the Determinations issued by the Fair Work Commission.

Download this form here.