At the time of writing this article, Christmas is a matter of weeks away. If your business shuts down for a period over the Christmas – New Year period, please read on.
A shutdown occurs when a business temporarily closes, such as Christmas and New Year.
Many awards and Enterprise Agreements (EA) contain clauses about annual leave, and it being taken during a shutdown. The requirements set out in each award and EA can differ, and as a result it is important to check the relevant requirements prior to giving employees a direction to use annual leave during a shutdown.
Award covered employees
The majority of Awards provide that:
- employers may require employees to take paid annual leave during a temporary shutdown;
- employers must provide at least 28 days’ written notice* of the temporary shutdown period to all impacted employees;
- the requirement to take annual leave must be reasonable;
- the notice period can be reduced through an agreement between the employer and the majority of relevant employees;
- where an employee doesn’t have enough paid annual leave to cover the whole period they can agree with their employer for other options for the days not covered, such as:
- using accrued time off
- annual leave in advance, or
- leave without pay.
An award may also provide that a business can only close during certain periods, such as the end-of-year period. It is therefore important to check what restrictions, if any, apply.
* Some Award provides for a longer period, for example, the Building and Construction General On-Site Award 2020 (B&C Award) requires two months written notice.
EA covered employees
If an EA applies, check the terms of the EA for shutdowns or closures. EAs can contain rules about when an employee can be directed to take leave during a shutdown and the notice required to be provided.
Awards and agreements without shutdown rules
Employers can’t direct their employees to take annual leave during a shutdown if their award or EA doesn’t have rules allowing the direction.
However, employees can agree with their employer to take annual leave (including before they’ve accrued it) or unpaid leave during the shutdown. Communication is important when discussing an intended shutdown.
Award and agreement free employees
If no award or EA applies to an employee, employers can only direct that employee to take annual leave if the direction is reasonable.
Need Help Navigating Shutdown Provisions?
At IRiQ Law, we specialise in helping employers manage complex workplace matters, including shutdowns and employee leave.
With only 5 weeks until Christmas, now is the time to start communicating about shutdowns – if you haven’t already done so.
Some tips from IRiQ Law are:
- Ensure you provide the required notice of a shutdown, in writing, in accordance with the relevant award or EA;
- Where a longer notice period is required, for example the B&C Award, commence discussions now to reach agreement on a shorter notice period;
- Ensure staff can be accommodated if a direction is not applicable due to the position not being covered by an award or an EA;
- Consider excess leave balances and consider requesting employees, in accordance with the relevant Award or EA provision, to utilise any excessive leave during the shutdown.
Contact us today to ensure your Christmas shutdown is handled smoothly and in compliance with the law.
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