Pay averaging for purchasing additional annual leave
Description
Eligibility for Award employees
Eligibility for non-Award employees
What employers should know or do
Description
This provision allows employees to take extra leave each year by pay averaging, so that an employee has more leave but is paid at a corresponding lower amount of pay across the year. Employees receive a proportionate salary over a full 12 month period, which amounts to extra unpaid leave in a year.
For example;
- if a 48/52 arrangement was negotiated, the employee could work 44 weeks in the year, take four weeks annual leave, and take four weeks unpaid leave. Throughout the year the employee would receive a reduced rate of pay based on 48 weeks of pay that has been averaged over the year (i.e. 52 weeks)
- Employees may negotiate other arrangements, including 46/52 pay averaging
This arrangement allows employees who care for children to take time off during school holidays or employees who need additional study time to schedule the additional leave to coincide with examinations or other study requirements.
Eligibility for Award employees
Pay averaging for purchasing additional leave is not provided for under the Industrial Relations Act 1999 (PDF, 1.9 MB) , and must be negotiated with and approved by the employer in a certified agreement. A state agreement must pass the no-disadvantage test. That is, it does not disadvantage employees in relation to their employment conditions. For a federal agreement to be approved it must meet the Australian Fair Pay and Conditions Standard (non-Queensland Government link).
Eligibility for non-Award employees
For non-award employees the main concern is that each employee receives the Queensland Minimum Wage (QMW). If after the pay averaging occurs the employee still remains above the QMW, then the non-award employee may negotiate for this provision.
What employers should know or do
- Extra leave for proportionate salary arrangements should be negotiated on a yearly basis. The arrangements should be negotiated with and agreed to by the employer and recorded in writing, and may be altered by agreement between the employer and employee at any time.
- Work scheduling may be more difficult if a large number of employees request leave at the same time. It may also be harder to balance employee needs with client service demands in some work units.
- When introducing this type of arrangement, it is important to consider the impact on the organisation of possible losses of productivity or client contact time.
Last updated 21 July 2009
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