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Trading your leave for cash isn't the jackpot you think it is

Caitlin Fitzsimmons

Before the US election, Donald Trump said that he wouldn't take a holiday as president.

Even in his life before politics, Trump rarely took a holiday. He prefers to spend any relaxation time doing business deals on his own golf courses.

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In 2012 he tweeted:

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(It remains to be seen how much he'll enjoy the work of being president of the United States).

Trump's reluctance to take time off could be his most relatable quality, even for Australians who get much more annual leave than Americans.

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While Americans get two weeks a year as standard, in Australia the legal minimum is four weeks.

But that doesn't mean we take it.

In some countries leave entitlements are "use it or lose it" but that's not the case here. We get to roll it over, and we do. We're chronic leave hoarders.

The 8.5 million Australians in the paid workforce have 134 million days' worth of annual leave accrued between us, according to Roy Morgan research from September this year. That amounts to almost 16 days each.

While almost one in two of us have less than four weeks' annual leave accrued, one in three have more than four weeks. And that includes 257,000 people – 3 per cent of the workforce – with 10 weeks or more racked up.

Unlike Trump, many of us enjoy holidays and more than four out of five of us plan to take at least one in the next 12 months.

But cashing out your leave could become more common, after a ruling by the Fair Work Commission in May this year.

The decision changed 112 of Australia's 122 modern workplace awards to allow employees to exchange two weeks' worth of annual leave a year for cash, provided they still have four weeks remaining afterwards.

That might seem like a good thing. It means employees can choose what's important to them: time or cash.

Not so fast.

The problem is that many of us don't take leave because the demands of our job make it hard to get away.

Currently, businesses have to carry their employees' leave balances as an obligation in their accounts. If that burden is alleviated, they would have less incentive to enable people to take time off.

And if the extra salary goes to fuel bigger mortgages and perpetuate the housing boom it will quickly become essential income rather than a bonus. That's why the term "rat race" was invented.

I know how difficult it can be to get time off even with the best will in the world from your employer and colleagues. Even though I took two single weeks off this year, I currently have six weeks' leave accrued.

Fortunately I'm about to put this to rights. This time next week I'll be on holiday and I've managed to get five glorious weeks off. I'm planning to spend Christmas with my cousins in Queensland, take my five-year-old twins camping for the first time and hang out at home in Sydney catching up with friends and family.

I can hardly wait.

From past experience I believe that you need one week to relax into holiday mode and then the second week to actually enjoy it.

It's a bit like exercise, with fitness trainers telling you that you need 20 minutes of cardio before it actually does you any good.

There are countless studies that show the positive effects of holidays. Time off work makes us happier and healthier, and time off together as a family makes our relationships stronger.

I know that I have more energy and creative ideas when I have recharged with some extended down time.

There are even studies that suggest the positive effects of anticipating a holiday. People who have a holiday planned in the next 12 months tend to be happier and more optimistic, though it's unclear what's cause and effect.

In the past I've had "holidays" where I've been unable to cut the umbilical cord to the office and I've answered emails during my time off.

I've learnt from my mistakes. This time I'm not going to do a lick of work, and I'll set my out-of-office reply to let people know that I'll be deleting emails on my return after Australia Day.

You'll only hear from me before then if I've managed to do it in advance. My "to do" list this week is epic, but it's worth it for five weeks off.

See you next year.

Caitlin Fitzsimmons is a Fairfax Media columnist and editor of the Money section. Find her on Facebook and Twitter.

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