Can employers refuse their employee's annual leave request?

Yes, but only if there are reasonable grounds to do so.

Reasonable grounds for refusal

There is no simple formula for when refusing an annual leave request will be considered ‘reasonable’. This will depend on the individual and operational circumstances and assessed on an overall ‘case by case’ basis.

This means that employers should not be too quick to refuse a request and must carefully consider all relevant factors before making a decision. Ultimately, employers should strive to be as flexible as possible unless accommodating such requests would unreasonably disrupt the business.

Here are some factors that employers can consider when deciding whether they can accommodate an employee’s request:

1. whether the employee has provided reasonable notice (eg an employee providing less than one weeks’ notice will likely be considered unreasonable)              - if an award or an enterprise agreement applies, consider whether this complies with the requirements (if any) relating to the taking of annual leave. This also includes any leave related policies that the employer may have;

2. the operational needs of the business during the proposed period of annual leave  - this will depend on the industry of the business. In the Hospitality industry, it will likely be reasonable to refuse annual leave requests for leave that will fall during the festive/ holiday seasons. This will likely also be the case when an accountant is applying to take annual leave nearing the end of the financial year; 

3. the role/ position of the employee      - certain positions are more crucial than others and therefore may be required to be present at the workplace during key periods (eg supervisor’s request cannot be approved as they are required to manage workers); and

4. the period of leave which the employee wants to take                    - it may not be reasonable to refuse a request (even in cases where short notice is given) where the proposed period of leave is relatively short (one or two days) with little impact on the business.

These factors (above) should not be strictly applied but will be will useful in informing the employer’s assessment as to whether it is, in overall, reasonable to refuse the request.

Balancing workplace safety risks with annual leave request

When considering an annual leave request, employers must also take into account their WHS duties.

This means that even if the employer has identified a reasonable reason to deny an annual leave request, an employee who is in need of this break (eg overworked, exhausted, etc) must be allowed to take it. Denying a request in these circumstances (especially when it is obvious that the employee hasn’t taken annual leave for an extended period or showing signs of exhaustion, etc) could injure or harm the employee if they continue working.

This can amount to a possible breach of the employer’s WHS duties.

Recommendations

To help manage annual leave requests, we recommend that employers consider:

1. implementing a Leave Policy setting out the process and requirements for taking leave including introducing a ‘block out’/ ‘black out’ for busy periods (identifying a particular period where annual leave cannot be taken) and limiting how many employees can take leave at once (the policy should be applied flexibly and fairly);

2. raising employees' awareness of the relevant Leave Policy (if any) - through newsletters, toolbox meetings, etc;

3. encouraging your employees to plan their leave early especially when approaching a busy period; and

4. cultivating a supportive work environment where employees coordinate their leave plans (eg taking annual leave in rotation).

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