While the Fair Work Act 2009 (Cth) states that modern awards can include provisions for cashing out annual leave, until now only one modern award, the Seafood Processing Award, actually contained such a provision. Employees covered by any other modern award have been unable, until now, to cash out their annual leave.

Previously, employees not covered by a modern award, or whose enterprise agreement provided such an arrangement, could only cash out their annual leave, as long as the cashing out satisfies the provisions contained in section 93 of the Act. This section provides that annual leave can be cashed out as long as:

the employee is not left with less than 4 weeks annual leave;each cashing out of a particular amount of leave must be evidenced in writing; andthe employee is paid the full amount that they would have been paid had they taken the annual leave.

A change is here

The Fair Work Commission has now decided that all modern awards should allow for the cashing out of annual leave, on grounds similar to those already provided for in section 93 of the Act. This will permit employees who are covered by a modern award to cash out accrued annual leave in excess of four weeks. Again, the terms provided for in section 93 of the Act must be adhered to. Furthermore, employees covered by a modern award will be limited to the amount of annual leave that they can cash out, being a maximum of two weeks in any 12 month period.

Can an employer direct an employee to take annual leave?

The Fair Work Commission has also authorised the insertion of a new clause into all modern awards, allowing employers to direct employees to take annual leave where the employee has accrued at least 8 weeks annual leave (10 weeks if a shift worker).

Much like the cashing out provision outlined above, there will be a number of rules that employers must adhere to when directing an employee to take annual leave, which are as follows:

an employee can only be directed to take annual leave after a genuine attempt has been made by the employer and employee to reach an agreement as to how to run down excessive leave;
the direction to take annual leave must be in writing and must specify a commencement date between 8 and 52 weeks from the date of the notice;
the employee must retain at least 6 weeks annual leave after directed leave has been taken;
directed annual leave cannot be taken in blocks that are shorter than one week; and
an employer cannot unreasonably refuse an employee's request to take directed annual leave at a time that better suits them.

Employers beware

Although these changes will provide the majority of employers increased flexibility in how annual leave is taken by their employees, employers must remember that they cannot exert undue pressure or influence on an employee to cash out or take directed annual leave. Furthermore, employers cannot mislead their employees about their entitlements under any cashing out or directed leave arrangement.

If you require assistance, please give us a call on 1300 205 506 or send an email to sp@sharrockpitman.com.au.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Written by a member of our Legal Team

For further information contact

Mitchell Zadow

Mitchell is the Managing Principal of our law practice.

He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate. For further information, contact Mitchell on his direct line (03) 8561 3318.

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However, in this article we will set out the factors that influence how long it will take to obtain a Grant of Probate and to administer an estate in Victoria.

The basics

First things first: what is a Grant of Probate? A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will. Without Probate, the asset holders (say a bank or share registry) cannot be satisfied as who has the correct authority to receive the deceased's assets and may refuse to pay out.

Sometimes, for smaller estates or if assets are mostly jointly owned with a surviving spouse, asset holders might agree to release payment without requiring a Grant of Probate. This is usually on the basis that the person who receives payment promises to repay (or Indemnify) the asset holder if it turns out they paid to the wrong person.

If there is no Will, then you cannot obtain a Grant of Probate. Instead you obtain Letters of Administration. This is effectively the same, in terms of authorising someone to administer the estate, and would usually be obtained by the person who is the closest next-of-kin to the deceased.

“A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will.”

Timeframes for Probate in Victoria

In order to obtain a Grant of Probate, the Supreme Court needs to be given information about the assets and liabilities of the estate, the deceased person, the witnesses to the Will, the executors and the Will itself. An advertisement of your intention to apply for Probate must also be published on the Supreme Court website for at least 14 days prior to any application being lodged.

Often, making enquires to obtain all the necessary information can take a number of weeks. Also, you will need the Death Certificate for the application for Grant of Probate and possibly for making proper enquires regarding the assets and liabilities. Waiting for the Death Certificate to issue can therefore add a few more weeks to the process. Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.

The Court itself usually does not take long to process the application (maybe another 1 to 2 weeks) and this is completed using the electronic Supreme Court filing system. This means you do not have to go to a Court hearing. The timeframe for processing applications for Letters of Administration is even less, given that there is no Will document for the Court to consider. There is also a general discretion for the Court to raise a 'Requisition' asking for more information before they review the application - this can sometimes delay matters.

“Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.”

So, here we are a few months after death and you finally have a Grant of Probate or Letters of Administration. It is important to remember that this is the start of the estate administration and not the end. For a very simple estate, you might only need a further month or so to cash the assets and pay them to the correct beneficiaries. However, it can often be more complex than that. Factors that determine the timeframe to administer the estate include:-

Some assets will take time to cash or transfer. For example, if selling a property, final settlement might be 60/90/120 days from the day of sale.
There is a 6 month period for challenges to be brought against the estate and executors must wait until this period expires before distributing the estate, if there is any risk that a disgruntled family member might come forward.
There might need to be final tax returns for the deceased or for the estate. Failing to wait for the ATO to process these could leave the executor personally liable for a tax bill.

You might need to advertise for creditors to come forward and wait for a period of months while this advertising timeframe expires. This protects the executor if they are unsure of all of the deceased's financial dealings and creditors.
It might not always be a good time to immediately cash estate assets. For example, the shares just took a nose-dive, do you still sell regardless of available price?

There is a general rule that executors have an 'executor's year' to complete the estate administration. This means that you should be aiming to have the estate finalised and distributed within 12 months from the date of death.

Liability limited by a scheme approved under Professional Standards Legislation.

Need help with Probate?

Our expert legal team is ready to take your call!

Mitchell is the Managing Principal of Sharrock Pitman Legal. He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:

DIRECT LINE:

(03) 8561 3318

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Can annual leave be cashed out?

A change is here

Can an employer direct an employee to take annual leave?