Annual leave lottery: how does Australia compare?
5 November 2013
Paid annual leave is an important employment entitlement for workers, allowing employees the chance to enjoy a break, while still having some financial security.
In tougher economic times, business leaders may be tempted to see time off work as damaging to output and the work ethic but, looking at the global perspective, some economists refute this. In an article published in Time magazine, economist John Schmitt puts forward the case of Germany versus Greece; comparing the relatively strong economy and low unemployment in Germany to the poor economy and high unemployment in Greece, which has significantly less paid holiday provision.
Annual leave entitlements for Australian employees are set out under the National Employment Standards (NES) and in individual contracts and agreements. On average Australian workers are entitled to four weeks of paid leave per year, but how do we compare on a global scale?
Put simply, an average Australian worker gets four weeks of annual leave for every 12 months worked, while certain shift workers are afforded five weeks.
According to the Fair Work Ombudsman, these employees include those who work at an organisation that has 24/7 rosters, and are regularly required to work irregular shifts or on Sundays and public holidays.
It may come as a surprise to some that employees in the world's largest economy do not fare as well as Australians. So, how much annual leave are US workers legally entitled to? The answer is...none.
In its No-Vacation Nation report, the Centre for Economics and Policy Research (CEPR) noted that the United States is "the only advanced economy in the world that does not guarantee its workers paid vacation". Although some organisations do provide paid holiday to workers, this is not set out in legislation.
Employees in Japan are reputed to be extremely hard-working and industrious, but do they get the paid leave their efforts merit?
They fare better than Americans, but not by much. Workers are entitled to just 10 days of leave after 12 months with the company.
From then on, they earn extra days the longer they work for their employer, usually a day for each year they stay with them. The maximum number of annual leave days, however, is ultimately capped at 20, even for senior employees.
The picture varies widely in Europe, although European Union (EU) members are bound to a minimum annual leave provision of 20 days per year by the EU Working Time Directive (1993). Legislation in France provides employees with 30 days of annual leave per year plus an extra day of paid holiday, while the Netherlands gives workers just 20 days of annual leave.
In the global context, Australian workers appear to be getting a reasonably good deal when it comes to leave entitlements, with the basic provision of four weeks seeming standard compared to other developed countries such as the UK.
Depending on the needs of the business and its employees, some organisations may choose to offer further time off, flexi-time and flexible working arrangements in addition to the basic entitlements set out in the NES.
However, all policies, contracts and agreements must still be in line with legislation and employers should seek professional advice from an HR consulting firm if needed to ensure that they remain compliant.
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