Annual leave must generally be taken by agreement between the employer and employee. An employer can give an employee a general direction to take annual leave, but cannot direct them as to when they must take the leave (i.e. cannot direct them to take the leave at a particular time). A WA award or industrial agreement which has a provision that enables an employer to require an employee to take annual leave at a particular time is of no effect.

Where an employee has accrued their annual leave more than 12 months ago, an employee can take annual leave with two weeks’ notice to their employer, and the employer cannot refuse their request to take annual leave.

If the leave has not yet been accrued for 12 months, the employee needs to reach an agreement with their employer about taking the leave.

Employees are to be paid their current rate of pay when they take annual leave. 

Commission-only and piece rate employees are to be paid the highest of the following for a period of annual leave:

• a rate payable under a WA award or contract of employment for a period of leave;
• a rate calculated according to the employee’s average weekly earnings over a period totalling 365 days immediately before the time the annual leave is taken; or
• the applicable minimum rate of pay.

Where the rate of payment for a period of annual leave is being calculated according to the employee’s average weekly earnings over the 365 days before the leave is taken, any period during which the employee was on unpaid leave and any period during which the employee was stood down in accordance with an award, industrial agreement or legislative provision is not included in the calculation. 

Annual leave loading

Employees who are not covered by an award or agreement do not receive annual leave loading unless it is specified in a contract of employment.

WA awards and industrial agreements may require annual leave loading (usually 17.5%) to be paid when an employee takes annual leave, and may require payment of annual leave loading when annual leave is paid out when an employee's employment ends. Awards and agreements may also require payment of certain allowances during annual leave. 

• If you are covered by a WA award, please check the specific provisions in any relevant award by viewing Wageline's WA award summaries, by contacting Wageline, or viewing the award on the Western Australian Industrial Relations Commission website. 
• If you are covered by an industrial agreement, please check the specific provisions in the agreement by contacting the human resources area of your employing organisation. 

An employee is generally entitled to be paid out annual leave when employment ends due to resignation, dismissal or redundancy. The exact entitlements may depend on the specific circumstance of employment ending.

Unused annual leave for any completed year of employment gets paid out when employment ends, except where the employee is dismissed for misconduct and the annual leave relates to a year of service completed after the misconduct occurred.

Employees get paid out pro-rata annual leave for part of a year of employment when they are terminated by the employer due to redundancy or dismissal (except for dismissal for misconduct). 

Pro-rata annual leave is also paid out when the employee resigns and gives the notice required by the employee’s WA award or industrial agreement, or if no award or agreement applies, the notice required by their contract of employment.

Some WA awards and industrial agreements also require an employee to be paid pro rata annual leave when they resign without giving the required notice, or when they are dismissed for misconduct. 

Employees must be paid their current rate of pay when annual leave is paid out. WA awards and industrial agreements may also require payment of annual leave loading (usually 17.5%) when annual leave is paid out. Specific payment provisions apply to employees paid only by commission or piece rates.

• If you are covered by a WA award, please check the specific provisions in any relevant award viewing the award on the Western Australian Industrial Relations Commission website, or by contacting Wageline.
• If you are covered by an industrial agreement, please check the specific provisions in the agreement by contacting the human resources area of your employing organisation.

The effect of a period of income or workers compensation on an employee’s annual leave accrual will depend on when the period of compensation occurred.

Please note: employees who have received workers compensation that is not under the WA workers compensation legislation (e.g. under the Safety, Rehabilitation and Compensation Act 1988 (Cth)) may have different entitlements. 

Periods of income compensation on or after 1 July 2024

Under the Workers Compensation and Injury Management Act 2023 (new WCIM Act), an employee accrues entitlements to annual leave during any absence from work on income compensation on or after 1 July 2024.  

For employees covered by the new WCIM Act, the entitlement to accrue annual leave during a period of workers compensation will apply irrespective of any condition within an award or agreement.

Periods of workers compensation before 1 July 2024

For periods of workers compensation before 1 July 2024, annual leave does not accrue unless:

• the employee was performing work during the period of workers compensation, including participating in a return to work program, in which case they accrue annual leave for any time that they perform work;
• the employee was receiving paid annual leave or long service leave while (i.e. at the same time) they are receiving workers compensation payments; or
• the relevant WA award or agreement specifically states that it does. For example, the Building Trades (Construction) Award states that employees continue to accrue annual leave while absent from work and receiving workers compensation (up to a maximum of 26 weeks).

It is compulsory for employers to keep employment records, including all leave taken. It is also compulsory for employers to provide employees with a pay slip. Learn more on the Employment records - Employer obligations page.

An employee who believes they have not been paid an annual leave entitlement due when employment ends can follow the process outlined on the Making a complaint page to make a complaint to Private Sector Labour Relations at the Department of Energy, Mines, Industry Regulation and Safety. 

Employees covered by WA awards or industrial agreements

Where an employee is covered by a WA award or an industrial agreement, an employee can only cash out annual leave if there are is a specific provision in the award or agreement which allows annual leave to be cashed out. Most WA awards do not contain provisions which allow cashing out of annual leave.

If an award or industrial instrument does allow cashing out, employers and employees must comply with the specific requirements on cashing out provided in the award or agreement. Employees who have queries about the specifics of cashing out provisions in an industrial agreement should contact their employer for information.

If the employee is not covered by an award or industrial agreement

Where the employee is not covered by an award or industrial agreement, employers and employees can agree to cash out annual leave if certain requirements are met.

The Minimum Conditions of Employment Act 1993 allows that after the end of any year of employment, the employer and employees may agree that the employee may forgo taking their annual leave in relation to that year, if all of the following circumstances are met:

• the amount of annual leave forgone does not exceed 50% of the whole amount of annual leave entitlement for that year of employment;
• the employee is given an equivalent benefit in lieu of the amount of annual leave forgone; and
• the agreement is in writing, signed by the employer and the employee.

Any agreement to cash out annual leave must be kept as an employment record, as part of an employer’s record keeping obligations.

An employer cannot:

• make an offer of employment to somebody that requires them to agree to forgo taking and cash out annual leave;
• exert undue influence or undue pressure on the employee in relation to whether or not to forgo taking and cash out annual leave; or
• require the employee to forgo taking and cash out an amount of annual leave.

Generally, an employee needs to work for 12 months before they can take annual leave unless the employer agrees that the employee can access the annual leave earlier. Some awards contain specific provisions to enable annual leave to be taken earlier. For instance, the Restaurant, Tearoom and Catering Workers' Award provides that the employer and employee may agree in writing that annual leave may be given and taken before the completion of 12 months' continuous service.

Under the Minimum Conditions of Employment Act 1993, annual leave must generally be taken by agreement between an employer and employee. Details regarding when an employee agrees to take leave, including during a closedown, may be found in a contract of employment, initial appointment letter or verbal agreement.

In the absence of agreement, an employee cannot be directed to take annual leave at a particular time. Additionally, where an employee has annual leave that accrued more than 12 months ago the employee may take any period of that leave by providing two weeks’ notice to their employer, and the employer cannot refuse the request to take the leave.

There is not a minimum entitlement to convert annual leave to personal leave if the employee was sick during a period of annual leave. 

Some WA awards and industrial agreements may contain provisions regarding converting annual leave to personal leave. 

• If you are covered by a WA award, please check the specific provisions in any relevant award viewing the award on the Western Australian Industrial Relations Commmission website, or by contacting Wageline.
• If you are covered by an industrial agreement, please check the specific provisions in the agreement by contacting the human resources area of your employing organisation. 

There is no obligation on an employer to grant an employee time off (paid or unpaid) for annual leave if there is no entitlement.

If an employee is on a period of paid annual leave, they do not have a minimum entitlement to payment for a public holiday because they are not required to work solely because it is a public holiday, but rather are absent because they are on a period of annual leave. 

However, a WA award or industrial agreement may provide for employees to have paid public holidays which fall during a period of leave.  

• If you are covered by a WA award, please check the specific provisions in any relevant award by viewing the award on the Western Australian Industrial Relations Commission website.
• If you are covered by an industrial agreement, please check the specific provisions in the agreement by contacting the human resources area of your employing organisation.