Employer Directed Annual Leave: When Your Boss Can Make You Take Leave

Published: January 2026 | Reading time: 9 minutes

Most employees think of annual leave as something they choose when to take. While this is generally true, there are specific circumstances where your employer can require you to take annual leave. Understanding when directed leave is legitimate helps you know your rights and respond appropriately if your employer tells you to take time off. This guide explains the rules around employer-directed annual leave in Australia.

The power to direct employees to take annual leave isn't unlimited. It's governed by the Fair Work Act, modern awards, and enterprise agreements, which establish both the circumstances where direction is permitted and the protections employees have against unreasonable demands.

Business Closedowns and Shutdown Periods

The most common situation where employers direct annual leave is during business closedowns. Many workplaces close between Christmas and New Year, during school holidays, or for annual maintenance shutdowns. Most modern awards and enterprise agreements allow employers to require employees to take annual leave during these closure periods.

If your workplace has a planned shutdown, your employer must give you reasonable notice of when the shutdown will occur and how long it will last. What counts as reasonable notice isn't defined precisely but should allow you to plan accordingly. Several weeks' notice is typical for planned annual shutdowns.

During a shutdown, you'll use your accrued annual leave for the closed days. If you don't have enough accrued leave to cover the shutdown period, arrangements vary depending on your award or agreement. Some allow unpaid leave, others provide for annual leave in advance. Your employer cannot simply not pay you if you lack sufficient leave. Check your specific award or agreement for the applicable rules.

Excessive Leave Balances

Another circumstance where employers can direct annual leave is when an employee has accumulated an excessive leave balance. Most modern awards define excessive leave as more than eight weeks of accrued annual leave. For shift workers with additional leave entitlements, the threshold is typically ten weeks.

Before directing you to take leave for an excessive balance, your employer must first attempt to reach agreement about reducing the balance. They should discuss your leave situation, understand any reasons for the accumulation, and try to find mutually acceptable times for you to take leave.

Only if genuine agreement cannot be reached can the employer issue a direction to take leave. Even then, the direction must be reasonable. The employer cannot require you to take leave that would reduce your balance below six weeks, must provide at least eight weeks' notice of when leave is to be taken, and cannot require you to take less than one week at a time.

Stand Downs and Business Disruptions

The Fair Work Act allows employers to stand down employees without pay when they cannot be usefully employed due to circumstances beyond the employer's control. Common examples include industrial action by other workers, natural disasters, or equipment breakdowns. During the pandemic, stand downs were used extensively when businesses were forced to close.

A stand down is different from directed annual leave. When stood down, you're not being paid and annual leave doesn't accrue. However, some awards and agreements allow or require employers to direct employees to take annual leave instead of standing them down without pay. This provides employees with income during the disruption.

Whether your employer can use annual leave during a stand down situation depends on your specific award or agreement. Some employees may prefer to preserve their leave and accept unpaid time, while others prefer the income from using accrued leave. Where the award allows, employers can make this decision, but must still act reasonably.

What Makes a Direction Reasonable

Any direction to take annual leave must be reasonable, considering the circumstances of both the employer and employee. Factors that affect reasonableness include the amount of notice given before the leave must commence, the length of leave being directed, the employee's personal circumstances and any alternative arrangements available.

A direction given with very short notice is less likely to be reasonable than one with adequate planning time. Similarly, directing someone to take leave during a period they've already communicated is problematic for personal reasons may not be reasonable if alternatives exist.

Use our annual leave calculator to understand your current balance. Knowing exactly how much leave you've accrued helps you assess whether a direction relating to excessive leave is appropriate and understand how a shutdown period would affect your balance.

Your Rights When Directed to Take Leave

When your employer directs you to take annual leave, you have several important rights. First, you're entitled to be paid for the leave at your normal rate, just as if you had chosen to take leave yourself. Any leave loading that normally applies should also be paid.

Second, you can challenge a direction you believe is unreasonable. Start by discussing your concerns with your employer and trying to reach agreement. If that fails, you can seek advice from Fair Work or your union about whether the direction is legitimate and what options you have.

Third, you cannot be disadvantaged for questioning a direction or seeking advice about your rights. Employers who penalize employees for advocating for their workplace rights face serious legal consequences.

Situations Where Direction Is Not Permitted

Your employer cannot direct you to take annual leave simply because it's convenient for them or to reduce leave liability on their books. There must be a legitimate reason, such as a shutdown, excessive leave balance after attempting agreement, or circumstances permitted by your specific award or agreement.

Employers also cannot direct leave as a punishment or in retaliation for exercising workplace rights. If you believe a direction to take leave is actually disciplinary action in disguise, seek advice about whether this constitutes adverse action under workplace laws.

The Fair Work Act protects annual leave as an employee entitlement. While there are legitimate circumstances where employers can direct its use, these are exceptions to the general principle that employees choose when to take their leave, subject to reasonable employer approval processes.

Negotiating Around Directed Leave

Even when your employer has the right to direct annual leave, there's often room for negotiation. If the proposed timing doesn't work for you, discuss alternatives. Perhaps different dates would suit both parties, or you could take a shorter period now with the rest at a mutually agreeable later time.

If you have plans that conflict with a directed leave period, communicate these early. Employers directing leave during business shutdowns often do so months in advance, giving time to discuss individual circumstances. Those with genuine conflicts, such as travel already booked for different dates, may find employers willing to accommodate alternatives.

For excessive leave situations, proactively planning to reduce your balance prevents the issue from reaching the direction stage. If you've accumulated significant leave, propose a plan to your employer for gradually taking it. This maintains your control over timing while addressing the employer's concerns about excessive accumulation.

Conclusion

While employers can direct employees to take annual leave in certain circumstances, this power isn't unlimited. Business closedowns, excessive leave balances after attempting agreement, and specific provisions in awards or agreements define when direction is permitted. Any direction must be reasonable, considering notice periods and employee circumstances.

Understanding your leave balance helps you navigate directed leave situations. Use our free annual leave calculator to know exactly where you stand. If your balance is approaching the excessive threshold, consider proactively planning leave to maintain control over your time off.

If you receive a direction to take annual leave and have concerns about its legitimacy or reasonableness, seek advice before simply complying or refusing. Fair Work and unions can help you understand your rights and options. Most workplace leave issues are resolved through discussion, so start by talking with your employer about any concerns before escalating the matter.