Shutdown Periods: What You Need To Know
Closing over the Christmas/New Year Shutdown Period? This is a guide to assist you in meeting your obligations when it comes to public holidays, annual leave, and overtime.
An Overview of Shutdown Periods
Businesses may choose to pause trading over the holiday and New Year period.
Doing so often requires employees to use leave.
Whether you as the employer has the right to direct your employees use this leave depends on the modern award or enterprise agreement that covers their employment.
In the event an employee is not covered by a modern award or enterprise agreement, an employer should look to the National Employment Standards for guidance on their rights and obligations.
In most awards and agreements, employers can direct a forced leave for annual shut-down periods.
However, should the relevant award not have a provision that addresses annual shutdowns, that employee cannot be directed to take annual leave as part of the business’ annual shutdown.
When you can direct employees to take leave and use annual leave as part of a shutdown period, you must be sure to give sufficient notice.
In most cases this notice period is a minimum of 4 weeks, although it is important you assess the award of all employees to determine whether they are entitled to more notice.
Annual Leave and Pay Requirements
Under the Fair Work Act, you can direct an employee to take annual leave as long as it within reason.
This can leave things open up to interpretation.
Section 94(5)(b) of the Fair Work Act lays out some examples of what a reasonable request might look like – e.g. closing for a set period like Christmas and New Year.
There are some days within this period that may not count toward the use of an employees accrued leave. – e.g. public holidays where an employee would not have been expected to work anyway (like weekends in many cases), or periods that are part of any other paid leave, e.g. carer’s leave, long service leave, etc.
Where an employee does not have enough annual leave to cover the period of annual leave, an agreement may be reached between both parties where the employee takes annual leave in advance or the leave is unpaid.
If an agreement cannot be reached, you cannot force an employee to take unpaid leave.
Akyra’s Key Takeaways
As with many areas of employment law, there is a lot to consider when preparing for a shutdown period and meeting your obligations to your employees.
Akyra recommends the following to ensure you do it right and don’t overstep in your role as an employer.
1. Identify Your Obligations
Assess the awards and agreements that cover your employees or the National Employment Standards when dealing with employees not covered by an award or agreement to identify what obligations you have – e.g. the period of notice you must provide your employees.
2. Be Willing To Negotiate
Not everyone spends their holiday period the same way.
There may be reasonable resistance to participating in forced annual leave as part of a shutdown period.
Where an employee has a right to they may not want to be forced to take leave as part of such a period.
It would be wise to hear them out and seek an amicable solution.
Perhaps there are some tasks or projects they could continue working on while other employees are not present or maybe they could spend this time engaging training or professional development relevant to the role.
3. Be Upfront
If you expect such shutdown periods to be an ongoing part of the way your business operates, be sure to address this during the interview stage of your recruitment process.
Knowledge of such an arrangement may influence an employee’s decision when offered a role with you.
Additionally, where you are upfront about it, employees can plan around this as they accrue and use leave.
Looking for Advice?
As with all human resource and employment advice provided in these blog posts, the recommendations and details provided are general and do not count as legal advice. For the best results, and to avoid surprises, we recommend you contact us to ensure the advice you’re getting is tailored to you and your needs. You can reach our team by calling us at (07) 3204 8830 today, or by emailing the team at connect@akyra.com.au.
At the time of posting this article, we are almost 4 weeks out from the beginning of shutdown periods throughout the nation, so act quick and contact Akyra Strategy & Development today.
NEED MORE INFORMATION?
Akyra can help your business to assist and support all your questions and concerns related to stay interviews and employee retention. Please contact Akyra on 07 3204 8830 or book a free 30-minute consultation for an obligation-free conversation.
Disclaimer – Reliance on Content
The material distributed is general information only. The information supplied is not intended to be legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice in relation to your specific situation.
