There are always a few employees who have a lot of leave saved up. You may be wondering whether you can direct your staff to take leave or do you have to wait until they request it? Generally, employers prefer that employees aren’t sitting in the ‘excessive leave’ category. This is because in the event of a resignation or termination, employers could be looking at a large lump sum payout figure.
Annual leave
An employer may direct an employee to take annual leave in limited circumstances, including where the employee has excessive annual leave or during a temporary shutdown period, such as Christmas or New Years.1 You should note that this right is subject to the provisions of applicable Awards, enterprise agreement or the terms of the employee’s employment contract, which permits such direction and the direction is reasonable.2
What constitutes excess annual leave? This will again depend on the Award and employment agreements in place. Generally speaking, an annual leave balance is considered ‘excessive’ if an employee has more than 8 weeks of leave (or 10 weeks for shift workers).3
An employment contract should set out the circumstances in which an employer may direct an employee to take leave so that there is no room for dispute. If your employment contracts don’t consider this issue, you may need to look at updating them. If a registered agreement says an employee can be directed to take excess annual leave but doesn’t set out specific rules about this, then the direction must be reasonable.
Shutdown periods
Since 1 May 2023, many modern awards have included updated shutdown provisions.4 Where those provisions apply, an employer may require employees to take paid annual leave during a temporary shutdown, provided the requirement is reasonable and the employer gives affected employees written notice, generally at least 28 days before the shutdown.
This notice period may be reduced where the employer reaches agreement with the majority of affected employees. Where an employee does not have enough accrued annual leave to cover the entire shutdown period, the employer and employee may agree on alternative arrangements for the remaining days, including the use of accrued time off, annual leave in advance, or leave without pay.
Employers should also be aware that where an employee agrees to take unpaid leave during a shutdown, they may still be entitled to payment for any public holidays that fall within that period. This will depend on whether the employee would ordinarily have worked on those public holidays, the terms of any applicable award or enterprise agreement, the circumstances of the unpaid leave arrangement, and whether there is an agreement that the employee will be paid for those public holidays.
Long service leave
In addition to the provisions of the relevant Award and the terms of the employee’s employment contract, entitlements to long service leave are determined under the long service leave legislation of each State and Territory. These laws ultimately govern how an employer can direct an employee to take long service leave.
For example, in South Australia, employers should grant long service leave to an employee as soon as practicable after the employee becomes entitled to the leave.5 If the parties can’t agree on when to take long service leave, an employer can direct an employee to take long service leave so long as they provide the employee with 60 days’ notice from the date from which leave is to be taken.6 In New South Wales, employers can direct an employee to take long service leave provided they give the employee 1 months’ notice (being 4 and one-third weeks).7
Employers also have to keep in mind that it’s not just permanent staff entitled to long service leave. In certain circumstances, casuals can be entitled to long service leave as well.
What if the employee has resigned and wants to take leave for the remainder of their notice period?
If both the employer and employee agree that rather than working out a notice period the departing employee will take leave, there is no issue. If, however, the employee does not want to take leave during their notice period, the employer can’t force them to, unless the employer is able to give a leave direction as discussed above, namely, in accordance with the provisions of an Award, the terms of the employee’s employment contract and the long service leave legislation of the relevant jurisdiction. Of course, the employer can choose to pay the departing employee their normal wages and ask that they don’t come into the workplace.
Employed while still on leave
Unless an employee has waived their notice period, it is crucial for employers to understand that employees are employed whilst on leave. Typically, employees will also accrue leave benefits whilst on a period of paid annual leave or paid personal/carer’s leave. However, annual leave will not accumulate on unpaid leave unless it is community service leave, or it is provided for in an Award or registered agreement.8
How we can help
If you’re an employer who is wondering if you can direct your employees to take leave or you are an employee who wishes to challenge such a direction, contact us on 1300 882 38 or email us to speak to one of our qualified and helpful people. Our team can quickly explain your rights and obligations to you and let you know what actions you can take.
The information contained in this post is current at the date of editing – 25 May 2026.
[1] Fair Work Act 2009 (NSW), s 94.
[2] Fair Work Act 2009 (NSW), s 93.
[3] https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/minimum-workplace-entitlements/annual-leave#:~:text=Generally%2C%20under%20these%20new%20rules,if%20they%20are%20a%20shiftworker.
[4] https://www.fairwork.gov.au/newsroom/news/new-shutdown-rules-for-awards
[5] Long Service Leave Act 1987 (SA) s 7(1).
[6] Long Service Leave Act 1987 (SA) s 7(3).
[7] Long Service Leave Act 1955 No 38 (NSW) s 4(a3), s 4(1).
[8] https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/minimum-workplace-entitlements/annual-leave#:~:text=Annual%20leave%20continues%20to%20accumulate,an%20award%20or%20registered%20agreement.
