Millions of Aussies could soon get extra annual leave with a union pushing for an extra week of holidays and a pay rise for casual employees.

The Australian Council of Trade Unions (ACTU) is pushing for the Albanese government to allow employees five weeks of annual leave, instead of four, and regular shift workers six weeks instead of five. 

The ACTU is also calling for a 2.5 per cent increase in casual loading to compensate casual workers who do not receive paid annual leave and would miss out on the proposed extra week. 

One barrier is that Labor was not elected with a mandate to increase annual leave, and it recently rejected the ACTU's plan to shorten working hours and introduce a four-day work week with no loss of pay. 

To improve its chances, the ACTU will seek support from the House of Representatives committee currently reviewing the Fair Work Act's National Employment Standards (NES). 

However, the union's push would ‘likely meet fierce resistance from business groups who oppose any extension of the NES in favour of workers while also seeking employer-friendly changes’. 

Although businesses would have extra costs if workers gained an extra week of leave, the ACTU said it would be cancelled out through less resignations and less injury and stress related leave.  

University of Melbourne economics professor Jeff Borland wrote in The Conversation in 2024 that the extra costs would be 'less than you might expect'.

'At the moment, an employer pays for 52 weeks to get 48 weeks of work,' Mr Borland said. 

'Suppose annual leave increases to five weeks. The employer would then need to pay for 53 weeks to get the same 48 weeks of work.'

He said that would be only about a two per cent increase in labour costs. 

If the movement successful, employees would have the same entitlements as IKEA, Bunnings and Apple staff and have the equal forth most annual leave in the world.  

ACTU secretary Sally McManus said the changes would be 'fair and reasonable'.  

'Getting back one of these weeks will mean a better-rested and happier workforce,' Ms McManus said.

'It's time Australia caught up. Our annual leave has been frozen at four weeks since the mid-1970s, half a century ago.

'Most workers weren't alive when annual leave last went up in Australia.'

She said the changes would boost productivity at work. 

'The average Australian would need to see their real wage increase by 10 per cent to make up the difference between productivity improvements and real wage growth since 2000,' she said.

'An extra week of annual leave would help to reduce that gap.'

Ms McManus said there was proof the proposed system would work. 

'The majority of European countries have already moved beyond four weeks,' she said. 

'Countries like Austria, France and Spain have already recognised the importance of rested, healthier employees and have higher rates of annual leave than Australia does. 

'They are some of the most productive and competitive economies in the OECD.'