Ai Group wants employers to have the right to direct an employee to take annual leave where the employee's accrued leave is "excessive", defined in the proposed model clause as more than six weeks of accrued leave, and during a close-down shut as over the Christmas holidays. The Ai Group submission, which is largely consistent with those given by other employers groups such as the Australian Chamber of Commerce and Industry, also suggests allowing annual leave to be granted in advance by agreement , with the employer having the ability to deduct payment for any leave granted in advance from monies owed on termination. Other proposals include giving bosses the right to pay annual leave as part of the employer's normal pay cycle, rather than in advance of leave being taken. Mr Wilcox said cashing out of annual leave beyond four weeks of accrued leave was now available for award-free employees, with the agreement of their employer, and under certain provisions in enterprise agreements. "However, where an award applies to an employee, cashing out is not available," he said. "Employees and employers covered by awards should not be disadvantaged." Unions are not on board with the proposed changes. "Annual leave entitlements are for the taking of leave to assist in work-life balance," said Australian Council of Trade Unions secretary Dave Oliver.

"Cashing out leave is essentially a cost-saving measure for employers as it enables them to squeeze an additional four weeks' labour per year out of each employee that has an accrued annual leave balance of four weeks, while also avoiding having to make arrangements to cover staff on annual leave or attempt to accommodate an employees' need to take annual leave at a particular time." Mr Oliver argued that employers were really seeking more work and fewer holidays for the same pay from their staff; and "as usual, it's the workers who come off second best". He said unions would fight to protect entitlements such as annual leave and ensure employees were not forced to trade off these "important entitlements". ACCI's submission, which is supported by a raft of employer groups from the mining, retail, hospitality and local government sector, has also called for terms allowing an employer to direct the taking of leave and for awards and agreements to include provisions for cashing out. It said both sides of politics would support a change. "The Liberal Party - through its WorkChoices legislation - and the Labor Party - through the introduction of the Fair Work Act - have indicated a preparedness to accept the cashing out of leave in Australia's industrial landscape," the submission said.

Employers make their case Its submission said the Fair Work Act sets some minimum requirements but leaves the specifics of regulation to awards and agreements. It said the act included the intention that "Commission not only can, but should, regulate the taking and cashing out of leave through modern awards". "The fact that the Fair Work Act permits, but does not prescribe, machinery in respect of directions to take leave and cashing out of leave strongly Indicates that Parliament expected that the Commission would create that machinery applying to award covered employees," its submission said. It also pointed out that cashing out was often something workers themselves wanted. "For employees, the cashing out can provide financial benefits in times of exceptional need," it said. ACCI's submission also highlighted changes to allow employers to force their workers to take leave where there was "excessive" leave of more than six weeks accrued, and during close down periods.

The employer lobby group referred to academic research that had found workers that do not take leave are likely to feel more stress and be less productive. And potential cash-flow problems when large amounts of leave had to be paid out if a worker leaves the organisation. "Allowing employers to direct the taking of leave should ensure a more balanced, rested and accordingly productive workforce," its submission states. "The variation [to the act] impacts positively on business, including on productivity, employment costs and the regulatory burden by assisting employers in managing their liabilities." ACCI also said that compelling employees to take leave would help boost tourism as "one of the most likely outcomes is that such employees will travel on holidays". In relation to varying "outdated provisions" in some modern awards that provide for an employee to be paid for their annual leave prior to commencing the period of leave, ACCI said credit rather than cash payments were likely to be used when people went on annual leave. "ACCI submission is not advocating for employees to simply use credit cards whilst on leave instead of using saved monies. Rather, the submission demonstrates that the sources and timing of payments vary dramatically in the present day to the traditional cash or cheque focused payments of the past."

ACCI's submission has been backed by a raft of employer groups including the , Australian Mines and Metals Association, Australian Hotels Association, Restaurant & Catering Australia, Australian Meat industry Council, Master Builders Australia and various local council bodies. @NassimKhadem This story first appeared on The Australian Financial Review