Shutting Down over Christmas and the New Year?

Many businesses shut down or if you are like us, run on skeleton staff over the holiday period. How employees are paid over this period depends on:

  • the award or agreement they’re covered by
  • whether they’re working or on leave.
  • Directing an employee to take annual leave

An employee can be directed to take annual leave during a shut down if their award or registered agreement allows it.

Most awards have rules about how and when an employer can direct an employee to take leave.  Some awards allow for an employer to give the employee a set amount of notice (e.g. 4 weeks sometimes even more) that the employee will need to take annual leave during the shut down period.

If an employee isn’t covered by an award or an agreement, their employer can direct them to take annual leave if the direction is reasonable.  Your employment agreement normally has a clause around any shut down.

If an employee doesn’t have enough annual leave?  If the award or agreement provides for it, an employer can direct an employee to take annual leave in advance of accrual, or unpaid leave, for some or all of the time.  We generally don’t recommend for an employee to go into negative accruals for sick leave or annual leave, however that is purely a business decision.

If your award or agreement doesn’t have rules about annual leave during shutdowns, an employer can’t direct an employee to take leave.  However, an employer and employee can agree that the employee takes annual leave (including in advance of accrual) or unpaid leave for the shut down time. The employee can’t be forced to take unpaid leave, so if an agreement can’t be reached with the employer, they need to be paid their ordinary pay for the time.

If a public holiday falls during an employee’s annual leave, and they are full time or part time, the employee is entitled to be paid for the public holiday; it is not an annual leave day. The employees base pay rate is applicable it shouldn’t be taken off their annual leave balance.

If employees continue to work when a business shuts down, they should be paid as normal. If any of the days are public holidays, these days are treated as public holidays. This means the employee should be given the day off without loss of pay or they should be paid public holiday rates as per their award or agreement.