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Refusing Requests for Annual Leave

The decision of the Fair Work Commission in the case of Adriana Stevens v Horsley Park Supermarket Pty Ltd T/A Carlo’s IGA Horsley Park [2017] FWC 4626 highlights the importance of ensuring that you have procedures, policy and documentation in place for an employer to refuse an employees request to take annual leave.

In this case, the employee was dismissed from her employment as a duty manager in a supermarket after she failed to come to work because she was on an overseas holiday, despite her application for leave for the holiday being refused. The employer argued that she had abandoned her employment. The employee argued that it was unreasonable to refuse the request to take annual leave.

The fair work commission agreed that the refusal by the employer to grant annual leave was unreasonable.

Section 88(2) of the Fair Work Act 2009 (Cth) states that “the employer must not unreasonably refuse to agree to a request by the employee to take paid annual leave”.

This case highlights that employers should, at least, take into account the following factors to ensure they do not fall foul of section 88(2).

   1.   The timeframe for dealing with requests

Once the employer receives an application for annual leave from an employee, the employer must review and decide the application within an appropriate timeframe and communicate the decision to the employee. The appropriateness of the timeframe will depend on the circumstances of the request.

The employee should do the right thing by the employer and give them as much notice as possible. That will give the employer time to assess the request and to make the necessary plans to cover for the employee’s absence should the annual leave be approved.

In this case, the employer received the employee’s request on 12 January 2017 for leave to be taken on 10 April 2017. A determinative response was not provided to the employee until 22 March 2017 – some 10 weeks later.

The FWC found that the employee had provided a significant period of notice which gave the employer “an enhanced opportunity to make arrangements to cover the absence”. The fact that the employer was aware that the employee had made arrangements to travel overseas and that she was at risk of losing $4,000 if she did not go, created an obligation on the employer to “communicate unequivocal refusal in a timely manner”.

   2.   The operational requirements of the business

It is reasonable for a business to take into account its operational requirements when refusing to approve leave. For example, many businesses in retail will block out the Christmas / New Year period as a “non-leave” period to ensure that they have enough staff available during that period.

In this case, the employer had an established leave block-out period during the April Easter season. It sought to argue that it had a reasonable basis for refusing the request for annual leave and for directing the employee to attend work – a reasonable and lawful direction that the employee refused to comply with.

The FWC acknowledged that “a decision to refuse a request for annual leave which is based upon genuine, sound business reasons would not usually be held to be unreasonable”. However, the delayed response meant that the refusal had become unreasonable due to the delay and the employee had little choice but to tell them that she could not attend work during that period.

   3.   Documentation of the process

As with most other employment issues, refusals to approve annual leave must be documented and provided to the employee as soon as practicable and in a manner that the employer considers appropriate in the circumstances.

In this case, the employer argued that the absence of any written approval between 12 January 2017 and 22 March 2017 (when they gave verbal notice of the refusal) should have been taken as a refusal of the employee’s request. The FWC rejected this argument and stated that the employer should have ensured that “unequivocal documentary communication of any decision to reject any application for annual leave is made in a timely manner”.

The FWC was also critical of the employer’s conduct in attempting to notify the employee of the possible termination of her employment by posting letters to her house when they knew she was overseas – an act that the FWC labeled as a disingenuous attempt to justify the dismissal.

Review your Leave Policy

You should ensure that you have a well drafted Annual Leave Policy in place to deal with processing annual leave requests and set out the circumstances in which leave will or will not be approved. This may prevent further disputes.

A well-drafted policy should outline when a request for leave should be provided to the employer, to whom that request should be provided, and may also provide examples of circumstances in which an employer might refuse to approve leave or even when an employer might direct an employee to take leave.

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Robert Rooney

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