Annual Leave accrual under the Workchoices Fair Pay and Conditions Standard

Under the Fair Pay and Conditions Standard annual leave accrues on a pro rata basis at the rate of 1/13 of the nominal hours worked each four-week period, and that amount is credited to the employee  each completed four-week period. This means that if an employee works a 38-hour week, over the course of a 12-month period they will have an entitlement to 152 hours of annual leave; equivalent to four weeks.

For example:

Hours of work per week: 38

Four-week period = 38 x 4 = 152 hours
= 152/13
= 11.692307 hours accrued each four-week period
= 11.692307 x 13
= 151.999999999
= 152

What are an employee’s nominal hours of work?

The employee’s nominal hours of work are their specified hours of work, capped a maximum 38 hours.

What is an employee entitled to be paid while on annual leave?

An employee is entitled to be paid their ‘basic periodic rate of pay’ they were receiving immediately before going on a peiod of leave. Many awards/NAPSAs and agreements may also require you to pay a special leave payment called the annual leave loading.

How do I work out the employee’s basic periodic rate of pay?

Take the rate of pay of an employee for a period worked and subtract any incentive-based payments, bonuses, loadings, monetary allowances, penalty rates and any other separately identifiable entitlements (Part 7, Div 2 Workplace Relations Act 1996).