It is not uncommon for us here at the Workplace Solutions Group
to get enquiries or requests for advice from employers about what
they can do about excessive annual leave accumulations, including
"cashing out".
The enquiries are usually of these two types:
- an employee asks for cash rather than taking leave, due to some
pressing financial need; or
- the employer realises it has a number of employees with large
leave accumulations and wants to know what it can do about it
Until March 2006 it was, generally speaking, impossible to
legally cash out annual leave (or long service leave for that
matter) except upon termination of the employee's employment.
By "legally" what we mean is that if an employer did pay
an employee the cash value of some or all of his or her leave
entitlement, without the employee actually taking leave and still
staying on in employment, the "cash out" was not legally
effective to reduce the employee's leave entitlement – ie
the entitlement
