Annual Leave and Christmas Shutdowns: A Guide for Employers

Planning a Christmas shutdown?

Temporary closures during the festive season are a great way to recharge, but they come with important legal obligations. Whether your business is covered by an award, an agreement, or neither, it’s crucial to understand the rules around employee leave.

If Your Employees Are Covered by an Award

Most awards include specific rules for managing employee leave during shutdowns. Here’s what you’ll typically find:

What If They Don’t Have Enough Leave?

Employees without enough accrued leave can negotiate with their employer to:

• Using accrued time off
• Taking annual leave in advance
• Taking unpaid leave

Agreement-Covered Employees

If your workplace is covered by an enterprise agreement, it’s essential to check its specific terms for shutdowns or closures. These agreements usually outline when employees can be directed to take leave during a shutdown and the notice period required before a shutdown is enforced.

Awards or Agreements Without Shutdown Provisions

If your award or agreement doesn’t have specific rules for shutdowns, employers cannot direct employees to take annual leave during this period. However, employees can agree with their employer to take annual leave (including before they’ve accrued it) or unpaid leave during the shutdown.

Not all awards or enterprise agreements handle shutdowns the same way. Understanding these differences ensures you remain compliant and avoid unnecessary disputes.

Award and Agreement-Free Employees

If no award or agreement applies, you can only ask employees to take leave if the request is reasonable. Think about whether the timing, notice, and length of the shutdown make sense for your business and your team.

Public Holiday Entitlements During Shutdowns

When employees agree to unpaid leave during a shutdown, their entitlement to public holiday pay will depend on several factors:

• Whether the public holiday falls within their ordinary hours of work
• The employee’s employment status
• Any applicable award or agreement provisions
• The terms of the unpaid leave agreement

Key Steps for Employers

Here’s how to stay on top of your shutdown obligations:

1. Provide Proper Notice: Ensure that the business provides notice in accordance with the relevant industrial instruments, including awards or agreements.
2. Manage Exceptional Cases: Develop a plan for employees who cannot be directed to take leave due to award or agreement restrictions.
3. Address Excess Leave Balances: Consider requesting employees with excessive leave balances to use accrued leave during the shutdown, following the provisions of the relevant industrial instrument.

Need Help Navigating Shutdown Provisions?

Proper planning, communication, and adherence to legal obligations can help employers during this period while maintaining compliance and fairness. At IRiQ Law, we specialise in helping employers manage complex workplace matters, including shutdowns and employee leave.

Contact us today to ensure your Christmas shutdown is handled smoothly and in compliance with the law.