By Calum Woods and Lindsay Carroll, NRA Legal
If your business relies on a block out period to manage leave requests during the busy season (or you’re thinking about implementing one), there are some important things you need to know.
The Fair Work Act 2009 requires that in most cases, annual leave is to be taken by agreement. However, there exists the requirement that an employer must not “unreasonably refuse” an annual leave request by an employee. In Stevens v Horsley Park Supermarket Pty Ltd  FWC 4626 the Fair Work Commission stated that the “default position” was one whereby refusing a request for annual leave during a Christmas or Easter block out period would not be unreasonable.
Practically speaking, block out periods are an entirely lawful and often necessary practice in the retail industry.
However, like any rule, there are exceptions.
The employee in Stevens applied in January to take annual leave during the employer’s Easter block out period, over 12 weeks before the leave was due to commence. Over the following months, the employee’s leave request was referred to a number of different managers. At no stage was it indicated to the employee that her annual leave request had been refused. The employee booked and paid for an overseas holiday to Thailand.
Two weeks before the employee was due to travel overseas (and 10 weeks after her initial request), the employer refused her annual leave request.
The employee decided to travel to Thailand anyway without having her leave approved, and the employer claimed she had abandoned her employment.
The Commission found instead that the employee did not abandon her employment, and that the employer dismissed her for disobedience in failing to attend work. The Commission held that even though the employer had a block out period in place, it was still unreasonable to refuse the employee’s annual leave request, having regard to the amount of notice provided by the employee and the employer’s failure to notify that her request had been refused. The dismissal was found to be unfair, and the employee was awarded a significant amount of compensation.
What does this mean for retailers?
Even though you have a block out period in place, it will not be sufficient in every situation to refuse an annual leave request.
You will still need to balance a number of different factors – make sure that you respond to leave requests promptly, and where an employee has given a significant amount of notice, seriously consider whether you can make an exception and grant the leave.
In the NRA’s upcoming webinar, Keeping track of Santa’s helpers – Managing authorised and unauthorised absences over the festive season we look at “block out” periods up close, as we deal with the top 5 most common questions from retailers about managing leave around Christmas.
The webinar will take place at 11.00 am AEST (Qld time) on 5 December 2018 and is free for NRA members.