What is happening right now?

As at early August 2022, there are two developments around FDV leave employers need to be aware of.

The first is the Fair Work Commission is currently considering whether to introduce a paid FDV leave entitlement into Modern Awards.

This means employers hiring workers under a Modern Award will need to monitor developments regarding the specific Award to know if they become obliged in the coming months to provide paid FDV leave to employees under that Award, and which employees can access the entitlement.

Employers should also note some Enterprise Agreements also incorporate Modern Awards “as amended”. This means paid FDV leave obligations could extend to those employers as well.

The second is the new Commonwealth Government has proposed legislation to make FDV leave part of the National Employment Standards (NES) set out in the Fair Work Act 2009.

The NES applies to most employment in Australia, so all employers will need to monitor the progress of this legislation. If passed, this legislation would extend paid FDV leave to most Australian employees (we understand the legislation would apply FDV leave to some employers – such as public sector employers – who otherwise would not be covered by the Fair Work Act).

What is the proposed entitlement?

The Victorian Chamber understands both the Fair Work Commission (in respect of Awards) and the Government (in respect of the NES) are proposing to introduce an entitlement to 10 days of FDV leave per year.

We understand the Government legislation, which will impact most employers if passed, is proposing the 10 days of leave will be available in full on commencement of employment and will also be available to casual employees.

We also understand the Government legislation is proposing the leave will not be at the employee’s base rate of pay, but rather will at their full rate of pay (including any penalties and allowances the employee might have received if they had not taken the leave).

Currently, employees are entitled to unpaid FDV leave under the NES.

When will all of this happen?

The short answer is we don’t know for sure. This will depend on the legislation passing in Parliament. We know that the legislation has been introduced to Parliament, has been referred to a committee for review, and a report is due from that committee in early September 2022.

We understand that, if passed, the Government legislation would commence from 1 February 2023 for most employers (and 1 August 2023 for small business employers – as defined in the Fair Work Act).

It is not yet clear how the Government legislation will interact with the Award review process currently being conducted by the FWC. The Award process may introduce paid FDV leave into Modern Awards before Government legislation comes into force.

To reiterate, we note the proposed legislation would provide for a different entitlement and process compared with the proposed Modern Award entitlement.

What do employers need to do?

For now, employers do not need to do anything other than monitor developments to know if/when they become obliged to offer employees access to paid FDV leave.

Some employers are deciding to get in front of developments and proactively offer this entitlement to their employees (for example, by amending contracts of employment or negotiating the entitlement as part of enterprise bargaining discussions).

How can the Victorian Chamber assist?

We are working with the Australian Chamber of Commerce of Industry (ACCI) and other stakeholders to ensure the Victorian business community is heard in relation to these changes.

Our Workplace Relations Advice Line and Consulting teams are monitoring developments. If you have any questions, don’t hesitate to reach out to our advice line by calling 03 8662 5222.