Under the NES, for employees covered by an award or agreement (including transitional award or agreement based instruments) annual leave can be cashed out if the award or agreement (including transitional award or agreement based instruments) allows it. Award/agreement free employees may also agree with their employer to cash out annual leave.
However, for all employees that agree to cash out annual leave, the following conditions apply:
- the employee must retain an entitlement to least four weeks paid annual leave
- there is a separate agreement in writing on each occasion that leave is cashed out
- the employer must not exert undue influence or undue pressure on an employee to agree to cash out an amount of annual leave
- the employee must be paid at least the full amount that would have been payable had the annual leave been taken.