Taking annual holidays

You are entitled to at least 4 week paid annual holidays (annual leave) when you have worked for an employer for 12 months.

What you’re entitled to

You become entitled to 4 weeks of annual holidays (also called annual leave) when you have worked continuously for your employer for 12 months. You may, however, have been granted more than 4 weeks annual holidays in your employment agreement.

• must allow you to take annual holidays when you want to, unless they have good reason not to
• must pay you for annual holidays before you take them unless you have agreed to be paid in your normal pay cycle
• can require you to take annual holidays in certain circumstances
• can choose to allow you to take some of your annual holiday entitlement in advance.

In some cases, you can agree with your employer to have your annual holidays paid out with your regular pay instead of taking time off – also called ‘pay-as-you-go’ holiday pay. This can only happen if you:

• are on a fixed-term contract This refers to employment with a set start and end date or event. Employees can only be employed for a fixed-term if there is a genuine reason for the fixed-term (for example, covering for parental leave or seasonal work like fruit picking). The reason, and the date or event that will end the employment must be in the employment agreement. of less than 12 months, or
• work so irregularly that it is not possible in practice for your employer to provide you with four weeks’ annual holidays in the normal way.

You can also ask to ‘cash up’ up to one week of your annual holidays each year if you want to. This means you get paid extra instead of taking annual holidays as time off work.

Calculating annual holiday entitlement

What constitutes a ‘working week’, and how you calculate your holiday entitlement, will depend on your working arrangement.

If you work the same hours on the same days each week, your annual holiday entitlement is simple to work out. Every 12 months, on the anniversary of your annual holiday entitlement, you get a minimum of 4 of your working weeks as paid annual holidays.

For example, if you work 3 x 8-hour days each week, you will get 12 x 8-hour days of annual holiday. (3 days x 4 weeks = 12 days.)

You may have a consistent pattern of work, but it’s not the same each week. This could be because:

• you work the same total number of hours or days each week, but the number of hours each day or the days worked each week changes
• the total number of days you work each week is the same but the total number of hours changes
• the total number of hours you work each week is the same but the total number of days you work changes
• you have a work pattern that is consistent but not based on a seven-day cycle, for example, you work 4 days on, 4 days off.

If this is the case, you can agree with your employer to work out your annual holiday entitlement in either days or hours.

Your employer should discuss the consequences of the choice with you and help you choose the best option for your situation.

You may have an unpredictable work pattern, and it's not possible to define in advance what a working week looks like – for example, you have no guaranteed hours, or you work to a roster that changes unpredictably each week.

If this is the case, you and your employer should try to identify if there is a pattern of work that could be used to calculate a working week for annual holiday entitlement. This could be based on:

• the agreed hours in your employment agreement, if these are a fair and reasonable reflection of your working week, or
• the days and hours you have been working in the weeks leading up to the annual holiday being taken.

Getting paid for annual holidays

You are entitled to be paid for annual holidays before they start unless you and your employer agree that you will be paid for annual holidays in your normal pay cycle.

If you agree to be paid in your normal pay cycle, this should be recorded in writing – usually in your employment agreement.

When you can take annual holidays

In general, you should be able to decide when to take your annual holidays. Your employer must:

• agree to your request for annual holidays before you can take the time off – or have a good reason for declining it, such as others having already arranged holidays at the same time
• allow you to take at least 2 of your 4 weeks’ annual holidays continuously.

Your employer can refuse a request to take annual holidays in advance.

When you might be required to take annual holidays

Your employer can require you to take some of the annual holidays you're entitled to if:

• you cannot agree with them about when your annual holidays will be taken, and they give you at least 14 days' notice, or
• they regularly close down for a certain period every year and give you at least 14 days’ notice.

Your employer cannot make you take annual holidays in advance.

If your employer closes the workplace unexpectedly (for example, if there was a natural disaster) and you refuse to take annual holidays with less than 14 days' notice – and are willing and able to work – you can’t be made to take annual holidays.

Cancelling annual holidays

Sometimes you or your employer may wish to cancel annual holidays that have already been arranged.

Neither you nor your employer have to accept the other’s request to cancel annual holidays, but you should negotiate a solution together, in good faith. For example, you could agree to:

• take a holiday at another time, or
• reduce the amount of annual holidays taken.

Any changes to arrangements should be in writing.

Vinh has been working as an administrator for a small mechanic for two years. He has arranged with his boss to take 2 weeks of his annual holidays over the school holidays in a month’s time. One week before Vinh is about to go on holiday, Vinh’s boss asks him to cancel his arranged annual holidays as the workshop has become unexpectedly busy.

Vinh does not agree to cancel all his requested holidays, as he wants to spend time with his family over the school holidays. However, he does offer to defer 2 days of his arranged annual holidays and work these days to support the business.

Taking annual holidays in advance

If your employer agrees, you can take annual holidays before you are entitled to them.

If you take annual holidays in advance, you get paid whichever amount is the greater of:

• your ordinary weekly pay This is used to help determine how much to pay an employee for annual holidays. Ordinary weekly pay includes everything an employee is normally paid weekly. Irregular or one-off payments as well as discretionary payments and employer contributions to superannuation schemes are not included in ordinary weekly pay. at the beginning of the annual holiday, or
• your average weekly earnings This is 1/52 of an employee’s gross earnings for the 12 months up to the end of the last pay period before they take an annual holiday. In some situations, average weekly earnings may be calculated over less than 52 weeks. – for the 12 months to the end of the last pay period – and before the annual holiday, or since your start date, if you have worked for your employer for less than 12 months.

Jiao has worked for her employer TJ’s Tyres for 24 weeks. Her employer agrees she can take one week of annual holidays in advance so she can attend a family wedding.

When she takes the leave, Jiao will be paid the greater of her average weekly earnings (her total gross pay for the whole time she has been working at TJ’s divided by 24), and her ordinary weekly pay (the pay that Jiao would usually receive for a normal working week).

When employment ends

When you leave a job, if you have unused annual holidays, or have annual holidays you are not yet entitled to take (as you have not yet worked 12 months), your employer must pay you their cash equivalent in your final pay.