IGA store slammed for mismanagement, ordered to pay worker $13,400 after taking too long to reject leave application

A Fair Work Commissioner has ordered a Sydney IGA store to pay $13,400 to a former employee, drawing attention to its “serious mismanagement’ after the business took more than two months to reject the employee’s annual leave request and then terminating her employment when she went on leave without approval.

A former employee of the Carlo’s IGA Horsely Park store filed an unfair dismissal claim earlier this year after she was terminated from her position as a duty manager after more than five years of employment at the store.

The lead-up to her termination in April 2017 involved the employee submitting an annual leave application for a holiday in Thailand over the 2017 Easter break.

She made the application to her supervisor on January 12, 2017, but this was not immediately approved or rejected by her supervisor, as her supervisor was soon to leave the Horsely Park store and the dates that were requested were within the store’s Easter “block-out” period for leave.

The request was then forwarded to the general manager of the business, but the Commission heard there was no recorded response from him when the matter was referred to him on January 23rd.

Ultimately, the worker was only notified on March 22 that her application for leave had been denied. At this point she told the employer she had arranged and paid for the trip and it could not be rearranged, and said she became “physically upset and unwell” at the news her leave had not been approved.

On April 5, the employee had a meeting with the supermarket’s business director and was informed if she did not come into work during the Easter period, her employment would be terminated.

The worker went on her holiday as planned and on returning to Australia on April 24th, contacted the business to request her letter of termination.

In responding to the claim, the employer told the Commission it had a sound case for refusing leave over the Easter period, and said the refusal of the leave request had been communicated to the worker from January.

In his decision, Fair Work Commissioner Ian Cambridge said given the size and nature of the business, it was reasonable to have block-out periods on leave approvals over periods like Easter and Christmas.

However, in this case he found the employee had given the employer a significant period of notice about when she intended to take leave.

Commissioner Cambridge was also critical of the “time lapse” between the application and the actual rejection of the leave, observing that while the application had not been signed off on, the worker still “had a reasonable expectation that it would not be refused” right up until she was given the news just over two weeks before she was scheduled to leave.

“Therefore, in the particular circumstances of this case, the employer unreasonably refused to agree to the applicant’s request for annual leave,” he decided.

“The procedure that the employer adopted when it dealt with the applicant’s request to take annual leave represented an unfortunate example of serious mismanagement.”

The employer has been ordered to pay $13,400 in compensation to the worker. SmartCompany contacted Carlo’s IGA but did not receive a response prior to publication.

The employee could not be reached for comment.

Keep communication open

It is acceptable for businesses to designate certain periods of the year as block-out periods for leave, says Trent Hancock, a senior associate at law firm McDonald Murholme, but communication of this is key.

“In particular when you have a supermarket, they’re naturally going to be a need for these,” he says. 

There are a range of ways these limits can be communicated, from inclusion in employment contracts to communicating block out periods in company-wide leave policies, Hancock says.

However, what clinched the decision for the employee in this case was the “way the application was dealt with by the employer,” he believes.

“In the decision, the Commissioner said it [the refusal] was a ‘tardy directive’,” he says.

The takeaway for small businesses is that even if you have communicated expectations around leave policies, if a worker puts in an application to take time off, it is not up to them to chase this application for a confirmation or refusal, Hancock says.

While there are no standard time periods by which an employer has to get back to a worker, he says the test will always be one of reasonableness.

If a business is approaching a block-out period for leave, Hancock recommends reminding staff not to book holidays prior to leave approval, and to give plenty of notice that a block-out stretch is approaching.

“Sending out reminders about the block-out,” he says. 

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