We had approved an annual leave request for one of our key employees, however, we have just secured a new project and need to cancel the annual leave as the employee will be running this new project. Are we able to cancel their annual leave?
An employer does not have a direct right to cancel an employee’s annual leave that has already been approved.
The Fair Work Act 2009 only provides guidance in regards to the fact that annual leave should be taken at a time mutually agreed by the employer and the employee, and that the employer should not unreasonably refuse an employee’s request to take annual leave.
Looking at the issue from an employment relationship perspective, if your employee has complied with your leave application process, and has been given approval to take the annual leave, then in good faith the employee believes they are free to make their holiday arrangements. This could include booking a holiday, flights, accommodation or arranging for concurrent leave to be taken when travelling in a group.
An employer that requests an employee to cancel their travel plans may result in the employee suffering a financial loss (for example, for non-refundable flights) and it is difficult to imagine how such action would not be seen as unreasonable. In addition, such a request may significantly damage the employment relationship with the employee.
The cancellation of annual leave should only be done with the AGREEMENT of the employee. An employer can ask the employee whether they can postpone or change their annual leave, but should be careful not to apply pressure, duress or threaten to dismiss or penalise the employee to agree to the change or cancellation.
If the employee feels they were pressured to agree, this could expose the employer to a general protections claim for taking adverse action against the employee for accessing a workplace right.
Further, where an employer does terminate an employee for refusing to agree to cancel their annual leave, this may potentially result in the employee making an unfair dismissal claim (if eligible) or pursuing other taking other judicial action.
