Shift Worker Annual Leave Entitlements in Australia: What SME Employers Must Know

Shift worker annual leave entitlements in Australia is one of the most misunderstood areas of payroll compliance for SME employers. Between the National Employment Standards (NES), modern awards and varying shift patterns, even experienced business owners can get it wrong.

Under the National Employment Standards (NES), most employees accrue 4 weeks’ annual leave each year. However, shift workers are entitled to 5 weeks of annual leave per year.

The question is — who counts as a “shift worker” for this extra leave entitlement?

Award-based definition example

Under the Electrical, Electronic and Communications Contracting Award 2020, a shift worker is defined as:

• A 7-day shift worker who is regularly rostered to work on Sundays and public holidays.

This means that if your employee’s role fits this pattern, they may be entitled to the extra week of annual leave.

Fair Work Act definition for award-free employees

If an employee isn’t covered by an award or agreement, the Fair Work Act says they will accrue 5 weeks of annual leave each year if they:

1. Work in an enterprise where shifts are rostered 24 hours a day, 7 days a week, and
2. Are regularly rostered to work those shifts, and
3. Regularly work on Sundays and public holidays.

The challenge with “regularly”

The Fair Work Act doesn’t define exactly what “regularly” means in this context. In the past, Fair Work guidance suggested that working 34 or more Sundays/public holidays per year was considered “regular,” but this guidance has now been updated.

For the most up-to-date advice, check the Fair Work Ombudsman’s guidance here:
Fair Work Library – Shift Workers and Annual Leave

What SME employers should do

• Check your award or enterprise agreement to see if it includes its definition of a shift worker for annual leave purposes.
  
• If your employees are award-free, compare their work patterns to the Fair Work Act’s definition.
  
• Keep accurate rosters and time records to show how often employees work Sundays and public holidays.
  
• Review these entitlements at least once a year, especially if work patterns change. 

Bottom line: 

For SMEs with shift workers, knowing exactly who qualifies for the extra week of leave is key to staying compliant and avoiding disputes. If in doubt, get professional advice and make sure your payroll system reflects the correct entitlements.