Recreation Leave Dispute - SA Health

18 February 2016

The Public Service Association (PSA) refers to previous PSA Briefs about this outstanding issue.

This issue mainly affects members who have changed their working hours over the last 12 months. When they apply for leave they find that they are either paid less than their current rate of pay during the period of leave, or are paid more than their current rate of pay and received less recreational leave than they consider they are entitled to.

This issue came to light after members contacted the PSA Member Rights Hotline with their concerns. In response to a PSA Brief more than 300 members advised that they had concerns. The PSA raised these concerns with the SA Health Chief Executive (CE) and provided a list of affected members.

When SA Health's response was unsatisfactory the issue was escalated to the Department of Premier and Cabinet (DPC). Meetings were held between SA Health, DPC and the PSA. Shared Services were also involved with the aim of understanding and resolving the issue. The PSA selected 10 members from its list to be audited in an attempt to understand what methodology was being used for calculating leave and how it affected these individuals.

The SA Health position is based on what they state is their obligation under the South Australian Fair Work Act, Schedule 4 – Minimum Standard for Annual Leave - which states at clause 3(a) that “an employee is entitled to four weeks annual leave for each completed year of continuous service”. SA Health states that ongoing employees have an entitlement for four weeks leave within each 52 week period. Further, that employees are not entitled to more than four weeks (except for seven day a week workers). That is, a person is entitled and required to take four weeks leave per annum, no more, no less.

When a person applies for leave, Shared Services' calculation is based on the current hours worked.

1. If an employee is currently working four days per week, and they apply for four weeks leave, they are given this as required at four days a week. However, if in the preceeding year there were periods when they were working two days a week and then possibly three days, then their accumulated recreational leave credit would be less than the 16 days required (i.e. four weeks x four days). The employee thus receives less pay for this four week period than in the previous fortnight when they were working.

2. However, if an employee is currently working fewer hours than they were previously working, e.g. they now work four days a week but may have accumulated leave as a full time worker - i.e. as a five day a week worker - and although they have accumulated 20 recreational leave days, the employer will only allow them to take 16 days, i.e. four weeks at four days a week.

SA Health then “pays them out” the additional four days by paying the worker more than 7.5 hours per day for the days of recreational leave taken.

SA Health says that financially employees do not lose. The PSA's stated position is that in this situation if the employee has 20 days accumulated then they should be able to take these days as paid leave, i.e. over five weeks at four days per week.

Those two examples are based on taking one full quota of leave every year. Many employees take segments of leave throughout the year. However, Shared Services' calculations are still based on that methodology which is confusing and hard to understand.

An employee may ask for three days leave and be told they are to be paid four days leave or find out they have been paid two days leave. This is because the calculation is pro rata i.e. proportionate.

The PSA considers that Shared Services adds to the confusion when they advise employees they are “averaging” their leave. This implies the concept of “unders and overs” i.e. a gain or loss. What Shared Services in fact are doing is allocating employees' accumulated hours of leave to the days they say the employee is required to take for leave, i.e. four weeks exactly per annum, at the number of days per week the employee is currently working. As can be seen this methodology is difficult to explain.

The PSA's Position
From discussions with members, the prevailing view is that they want to be able to take the hours of leave that they have accumulated as paid recreational leave at their normal hours and rate of pay. The PSA has stated to SA Health that our members should also have a choice, as below:

a. If receiving less than four weeks leave per annum then an employee could apply for additional leave without pay to make the leave up to four weeks.

b. If the employee has accumulated more than four weeks' paid leave over a 12 month leave period then they can apply to be “cashed out” the difference.

The Error Factor
The PSA is concerned that the current methodology can result in errors. A high proportion of errors was discovered with the employees who were audited. A concern is that these can be either way. If the error has advantaged the employee they will be advised that there is an overpayment and Shared Services will attempt to recover it. The correct methodology is difficult to explain and therefore hard for the employee to know if they have been paid correctly. The PSA also understands that it is hard for Shared Services to calculate. Therefore, it would be in the best interests of both the employer and the employee if the employee is entitled to take as paid leave only that leave that has been accrued by them and correctly credited to their leave balance.

Negotiations are continuing and the PSA hopes that commonsense will prevail.

Any questions or comments should be directed to the PSA.