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Aussie boss sounds alarm on controversial plan to double workers' annual leave: 'You will pick up the slack'

The Fair Work Commission is looking at a proposal that would allow employees extend their leave while taking half pay.

The founder of an Australian company has raised concerns about the plan to increase workers' annual leave by up to twice as much. At the moment, full and part-time Aussie workers get four weeks of paid mandatory annual leave on top of public holidays and other types of leave like sick, compassionate and carers.

But the Fair Work Commission is currently looking into a proposal that could see Aussies get half-pay if they wanted to extend their leave entitlements. The Australian Council of Trade Unions (ACTU) has suggested this could give employees “more time and flexibility to manage their caring responsibilities and balance work and care”.

“The proposal raises obvious concerns," former CEO Marco Bogaers told Yahoo Finance. "For staff to go on extended periods of leave requires that remaining resources pick up the slack, placing undue pressure on them in the workplace, or the business must increase its resourcing cost base."

Marco Bogaers next to someone on annual leave
Marco Bogaers has raised concerns about how a doubled annual leave policy will affect the workplace. (Source: Metropolis Metering Services/Getty)

Do you have a story? Email stew.perrie@yahooinc.com

A provision for employers to reject applications is being discussed, but Bogaers, founder of energy metering company Metropolis Metering Services, said that creates another problem.

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"It’s all well and good for the employer to have the right to say ‘no’, but when competing for available talent, this proposal tips the balance in favor of existing larger and better-resourced businesses at the expense of the smaller, emerging enterprises, which Australia so desperately needs.”

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ACTU's annual leave policy could have 'enormous ramifications'

Bogaers isn't alone in his worries.

The Australian Chamber of Commerce and Industry workplace relations director Jess Tinsley said employers are "really backing" this proposal as long as they still have the right to refuse long leave requests.

She explained to the Australian Financial Review that the policy "could have enormous ramifications on an employer, especially during a busy period or where they are short-staffed”.

Innes Willox, chief executive of the nation’s peak industry association Ai Group, also said companies will have to work out whether this proposal will be beneficial to them before adopting it.

“Awards should allow this kind of flexible leave arrangement to be implemented, but it is essential that it is only able to be used if an individual employer and employee agree to it,” he told the AFR.

“Managing staff absences due to existing leave entitlements is already very challenging for many employers. Additional periods of leave won’t be able to be accommodated in all circumstances.”

ACTU Secretary Sally McManus insisted bosses will be able to push back on annual lengthy leave requests under "reasonable business grounds" like it affecting the wider team.

The Fair Work Commission is expected to hand down its decision within the next three to four months. The Commission is also looking at whether staff should have the right to work from home.

Extending annual leave can't be 'seriously entertained'

There was a suggestion made last year for Aussies to get six weeks of mandatory annual leave instead of four.

HR and workplace expert Jonathon Woolfrey said increasing annual leave entitlements by an extra two weeks could be a game-changer.

“With two people working in most families, it’s time to actually acknowledge it’s very difficult to organise all the things you need to do … and you need a different way of being able to manage and deal with that in a modern workplace,” Woolfrey explained to 2GB Radio.

“It’s time for six weeks. We need to move towards that.”

But Ai Group said at the time that that idea “couldn’t seriously be entertained”.

“There is no reasonable case for reconsidering the amount of annual leave prescribed by the safety net of leave entitlements applicable in Australia,” Brent Ferguson, the group’s head of national workplace relations policy, told Yahoo Finance.

He said permanent Aussie workers already have annual leave that “exceeds that applicable in many countries”, especially in addition to public holidays and other types of leave.

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