The short answer: an employer generally cannot make an employee take annual leave unless a modern award, enterprise agreement, or the employment contract expressly permits it. The Fair Work Act 2009 treats annual leave as something taken by agreement between the employer and the employee — but there are specific, narrow exceptions most employers misunderstand. Getting it wrong creates real exposure under the National Employment Standards and can amount to an unlawful deduction from wages.

An employer can, however, direct annual leave in three situations: where a modern award or enterprise agreement has a shutdown clause, where it has an excessive leave accrual provision, or where the employee’s written contract expressly allows the direction (and it is consistent with the award). This guide covers shutdowns, notice periods, sick leave and excess accrual.

When Can an Employer Lawfully Direct an Employee to Take Annual Leave?

Under the NES, paid annual leave accrues progressively and is taken “by agreement between the employer and the employee” (division 6 of the Fair Work Act 2009). That default — agreement — is what stops most employers simply rostering staff onto leave at times the employer chooses.

The law lets an employer direct annual leave only where:

• A modern award or enterprise agreement contains a shutdown (close-down) clause.
• A modern award or enterprise agreement has an excessive leave accrual provision.
• The employee’s written contract expressly allows the direction and it is consistent with the applicable award.

Outside these, a unilateral direction is not enforceable. For day-to-day payroll compliance, assume leave is taken by agreement unless your award says otherwise, and back it with a clear leave policy from our free employment documents.

Can an Employer Force You to Take Annual Leave Over Christmas?

Yes — the most common lawful direction, but only where the modern award or enterprise agreement includes a shutdown clause. Many awards let an employer require all or part of the workforce to take annual leave during a planned closure, typically over Christmas and New Year.

The rules that normally apply:

• The shutdown must be a genuine closure of the business or a section of it, not a device to manage individual employees’ leave.
• The award usually sets a minimum notice period — commonly four weeks, sometimes more — given before the shutdown starts.
• Employees with enough accrued leave must use it. Employees without enough balance are generally paid for any public holidays that fall in the shutdown, and may take unpaid leave or be stood down without pay for the rest, depending on the award.

No shutdown clause means no unilateral direction over Christmas — you need agreement. Clause wording varies; some modern awards contain no shutdown provision at all, so check before you act.

Can an Employer Force You to Take Annual Leave During Notice Period?

Generally, no. During the notice period an employee is entitled to work out their notice, or to be paid in lieu under s.117 of the Fair Work Act 2009. The accrued annual leave that is not taken is paid out on termination under s.90(2). An employer cannot force an employee to take accrued annual leave during the notice period simply to avoid paying it out.

Some awards or contracts allow leave during notice if both parties agree. Agreement is fine; a unilateral direction to burn down the balance to avoid the payout is not. If your contract purports to allow it, check the term is consistent with the applicable award.

Can an Employer Force You to Take Annual Leave When Sick?

No. If an employee is genuinely unwell, they are entitled to paid personal/carer’s leave under the NES (s.96), as part of the HR best practice framework of entitlements every employer must honour. An employer cannot substitute annual leave for sick leave, and cannot deduct annual leave where the employee produces a valid medical certificate.

For the separate question of whether you can decline a request, see can an employer refuse an annual leave request, and for evidence rules see when you can require a medical certificate for one day sick leave. Forcing an ill employee onto annual leave is an unlawful deduction and a breach of workplace rights.

Can an Employer Use Your Annual Leave Without Consent?

No — not without one of the lawful bases above (a shutdown clause, an excessive-leave clause, or a valid express contract term). Using leave without agreement is an unauthorised deduction and can trigger a general protections or underpayment claim. Get agreement, or rely on a specific award clause — never guesswork.

Excessive Leave Accrual: Directing Staff With Large Balances

Some modern awards include an excessive leave accrual provision. Where an employee has accrued more than a set number of weeks — often eight — of annual leave, the award may allow the employer to direct the employee to take a period of that leave. But the direction is not open-ended: the award typically requires the employer to give notice and to consider the employee’s personal plans before setting the dates.

Document the accrual, give written notice and propose reasonable dates rather than imposing them. If your award has no such clause, an excessive balance gives no automatic right to direct leave — you need agreement. s.535 record-keeping obligations apply to leave balances just as they do to pay slips.