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  1. #1
    MadHR's Avatar
    MadHR is offline Forum Monarch
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    Oct 2011

    Annual Leave During Probation Period

    We are looking to implement a policy that prevents employees on probation taking annual leave during their probationary period, has anyone else done something similar?

    I don't see any legal issues with it, unless someone can advise me otherwise?

  2. #2
    Carol-ann.52 is offline Forum Monarch
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    Aug 2011
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    Dear MadHR

    Good question and one that is frequently asked and misunderstood by employers.

    Employees have the right to take holidays from Day 1 of their employment without there being any accrual of entitlement. However, as a lot of companies are nervous about dismissing someone during or at the end of their probationary period and having to deduct overtaken holiday entitlement and not having the final pay to cover such deductions, some companies do write into their written statements of terms and conditions of employment and/or holiday policy that holidays during the probationary period are restricted.

    You also have to ensure that you write into your written statements and/or policies that you reserve the right to deduct overtaken holiday entitlement that has not accrued from their final pay.

    If you wish to restrict holidays then you need to ensure that you run an accrual system of holiday entitlement that is built up over the first year of employment. This means that for every month they work they are entitled to one twelfth of their annual entitlement, or if they have 20 statutory days that it accrues at 1.67 days for each calendar month of service. However, you need to ensure that this is written into the written statement and/or policy.

    You can also restrict when holidays are to be taken, but again this must be written into the documents.

    If they work full time they are still entitled to any paid public or bank holidays or if they are part time,a pro rata entitlement.

    You also have to remember that a probationary period has no meaning in law and employees are permanent from Day 1. This means that any qualification period required for statutory rights in employment starts to run from Day 1 as well, irrespective of whether or not any probationary period is in place. The probationary period is a period where you have the opportunity to review how they fit in. However, most companies insert contractual entitlement that are conditional upon a minimum period of service that restrict benefits during this period, such as pensions.

    Whatever you do you must ensure that your written statements and/or policies contain these rights as well as a right to deduct overtaken holiday entitlement.

    If the employee leaves during the probationary period they would still be entitled to pay in lieu of untaken and accrued holiday entitlement.

    There is a lot that could be enhanced here to your question, but I have kept it short. If you wish to have any further info or advice, please do not hesitate to contact me.

    Best wishes


  3. #3
    stuartbell87 is offline Social User
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    Nov 2013
    According to Fair Work, an employee’s entitlement to annual leave accrues progressively on their ordinary hours of work and accumulates from year to year.

    There is no minimum period; an employee(other than a casual) having worked will have accrued leave. So yes, your employee is entitled to be paid the leave accrued during probation, but wait there’s more…

    If the employee is covered by a Modern Award(MA) that provides for Annual Leave Loading, the Loading will need to be paid on termination as well.

  4. #4
    Jjw's Avatar
    Jjw is offline Forum Addict
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    Oct 2013
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    Every place i have worked holidays are accumulated on hours worked. Not allowing employees to have holidays during probation could be seen as very unfair specially if the employees probation is long haul e.g 6 months. It would dramatically decrease employee productivity.



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