1. WEEKLY INSIGHT
Imagine planning a trip to Bali for a wedding, which would be your first trip in three years. You’ve pre-approved your leave for seven months in advance, but your boss tried to cancel your leave weeks before you were set to depart. This was the reality for Noel, an Australian worker whose boss demanded he cancel his holiday due to an unexpected staff shortage.
The employer (Noels’ boss) made two critical errors, constituting FWA violations. Firstly, there was a blatant disregard for the employee’s personal obligations, notably the non-refundable nature of plane tickets and accommodation, coupled with the imperative to attend a significant family event – his brother’s wedding. This conduct contravenes the FWA guidelines, which advocate for considering employees’ personal circumstances in scheduling (FWO 2024).
Secondly, the employer should have proposed alternative measures to address the staffing shortfall. This approach is at odds with FWA’s recommendations for employers to engage in meaningful dialogue with employees to identify mutually beneficial solutions during workforce planning challenges (FWO, 2024). Studies suggest that engaging employees in decision-making processes enhances job satisfaction and significantly mitigates turnover intentions (Smith, 2018).
Taking a pre-approved leave should’ve been a smooth process, but for Noel, it turned into a frustrating experience that left him feeling undervalued. Noel described his experience on TikTok as a cautionary tale so that other employees would feel empowered to know their rights and advocate for themselves. Since the video went viral with over 80,000 likes and 2000 comments, he left and left the organisation.
This highlights a shared responsibility. Employees must know their leave entitlements and never hesitate to raise concerns. Employers must develop a comprehensive leave policy and communicate it effectively to their team. Why? Because failing to honour employees’ leave entitlements can result in severe financial repercussions for employers. For instance, a leading Australian service station company has been directed to back pay or credit $2.3 million staff entitlements after it was discovered 1,524 workers were owed annual leave, and Woolworths faced similar scrutiny as it was alleged, they underpaid more than $1 million in long service leave to 1235 former workers.
2. HR/IR & LEADERSHIP.
Australia offers a unique system, unlike many countries with mandated “use it or lose it” policies for annual leave. The FWA (2009) highlights the right to accrue leave, which empowers employees to accumulate their entitlement over time, allowing them to strategically plan leave periods that best suit their needs (FWO 2024).
This emphasis on flexibility extends to scheduling leave. The Act encourages open communication between employers and employees. Employees can propose their desired leave periods, and employers must consider such requests “reasonably” (FWO 2024). While cashing out some leave is an option for immediate financial needs, limitations exist. Employees must retain at least four weeks and have a written agreement specifying details Research by ELMO software (HRD Australia 2023) reveals a surprising fact: 75% of Australian workers do not utilise their entire annual leave allowance.
However, a potential challenge exists with payment in lieu of notice (PILON) clauses. These clauses, increasingly common in Australian employment contracts, offer a payout in lieu of working the notice period upon termination. This payout often includes accrued but unused annual leave. While the legal framework protects unused leave, a 2017 study by the University of Adelaide’s Centre for Work & Social Studies found that 19% of terminated employees reported experiencing difficulties receiving annual leave payments. This highlights a potential disconnect between the legal framework and practical implementation, particularly with the rise of PILON clauses.
3. TEAM DIARY
In December 2023, Safe Work Australia reported 147 work-related deaths. Many HR professionals face a wide range of situations, but few are as sensitive and infrequently encountered as managing final payments for a deceased employee. marvinHR’s General Manager, Saarrah Mathinthiran, recently guided a client through this complex process, highlighting a critical yet often overlooked aspect of HR.
The reality is that many HR professionals need to prepare for this responsibility. A study published in the “Journal of Human Resources Management and Labour Studies” reveals a concerning statistic: less than 20% of HR professionals feel fully equipped to handle the legal and financial aspects of processing final payments for deceased employees. This significant knowledge gap underscores the need for more comprehensive training and resources within the HR community.
Processing final payments requires not only legal expertise but also sensitivity. Saarrah ensured the client understood the documentation requirements, such as death certificates and probate certificates. She also guided adhering to Australian Taxation Office (ATO) regulations regarding taxation implications. Currently, the lack of standardised protocols across industries creates inconsistencies in how organisations handle deceased employee final payments. This inconsistency can further burden grieving families during immense emotional strain.
Use marvinHR and your trusted partner to navigate the final payments for deceased employees. By leveraging marvinHR’s expertise and comprehensive support, you can ensure that the deceased employee’s final payments are handled with the utmost respect, legal compliance, and sensitivity during significant loss.
