Speak to a Lawyer
At Cairns Employment and Workplace Lawyers you will always speak to a Lawyer.
Fill out the form below and we will call you back to organise a meeting with your own Lawyer.
With only 36 days until Christmas and as the end of the year fast approaches, it is important that employers are clear on how their business will operate during the end of year holiday season.
Whilst the busy time may lead to an increased demand from staff, such as longer hours or work on Public Holidays, many businesses also take the opportunity to shut down (also known as ‘close down’) or operate on fewer staff over this time.
Whilst a shutdown period is a great time for everyone to spend time unwinding, relaxing and spending time with family and friends, it is important that businesses navigate this time properly and ensure they are meeting their obligations regarding staff entitlements and paying them for their time off during this period.
Properly managing these entitlements not only fosters goodwill among employees but also ensures you will remain compliant with all Fair Work requirements, including provisions outlined in agreements and awards.
The following is some handy tips on what employers and employees need to know about end-of-year entitlements and how these apply.
Agreement or Award Employees
Employers may elect for their employees to take annual leave during a shutdown, provided the award or agreement permits this.
Most awards outline specific rules regarding Shut Down periods and how and when an employer can issue a specific direction.
Generally, the direction to take annual leave must be:
- Reasonable
- In writing
- Provided to affected employees with at least 28 days’ written notice of the shutdown period, or a shorter period if agreed with most employees.
Award or agreement free employees.
If employees are not covered by a specific award or no agreement applies, the employer can only direct the employee to take annual leave if the direction is reasonable.
What is considered reasonable?
The National Employment Standards (NES) allows an employer to direct an award/agreement free employee to take annual leave, provided that the requirement is reasonable. A note in the NES suggests that a direction to take annual leave could be reasonable if the business is being shut down for a period, such as Christmas and New Year period.
Unlike any modern award clauses, the NES do not outline any prescriptive requirements such as a particular period of notice. However, the length of notice provided to an employee for a shutdown period, is likely to be considered should any dispute arise around the reasonableness of the direction.
Employees who don’t have enough annual leave to cover the shutdown period.
If an employee does not have enough annual leave to cover all or part of the shutdown period, they can agree to use other types of paid leave to cover the absence if available.
For example, a shortfall in accrued annual leave might be managed by mutual agreement to access:
- Accrued time off in lieu of overtime.
- Accrued rostered days off (where the applicable modern award/enterprise agreement allows for the accrual of rostered days off); and/or
- Annual leave in advance.
Certain awards or agreements also outline, that an employee who will not have enough Annual Leave to cover any shutdown period can agree with their employer to take:
- Annual leave before they’ve accrued it (leave in advance); or
- Unpaid leave for the duration.
Award or agreements without shutdown rules.
Employers cannot direct employees to take annual leave during a shutdown if their award or agreement doesn’t have rules allowing that direction.
In this instance, it is recommended that employees and employers come to an agreement on the employee using annual leave accruals in advance, or for the leave to be taken without pay.
Working During a shutdown period
Where only a part of an employer’s business is being shut down for a period, the employer may be able to direct an employee to perform suitable alternative duties during that period to those which they would ordinarily perform.
Where an agreement is made, that certain employees can continue to work during a shutdown period, these employees should receive their normal pay.
Where a public holiday falls within this period, the employee should be given the day off, without any loss of pay, or paid at the Public Holiday loading rates as outlined within their award or agreement.
Further Assistance
For further guidance and assistance, reach out to our experienced team at Cairns Employment Lawyers for individualised advice that you can trust.