As the festive season fast approaches there is talk about the staff Christmas party and taking a much needed holiday!
Being proactive and planning not only your Christmas celebrations but more importantly understanding your employer obligations and employee entitlements is crucial over this period.
Now is the time to consider:
- Will your business implement a shutdown period over Christmas and New Year and for how long?
- Will it be business as usual except for public holidays?
- Will your business operate with skeleton staff?
- What is the provision for shutdown periods within your employees’ award or agreement?
- Do your staff have sufficient entitlements to cover a potential shutdown period?
- Has your business documented anything around shutdown periods within employee contracts and/or policies?
In our experience (and reinforced by Kristin Ramsey from Hynes Legal) we have found that many employers are under the impression that the issue of taking leave or unpaid leave during a shutdown period is straight forward, they believe that:
- They can simply direct an employee to take annual leave during a period of shut down; and
- If the employee has insufficient annual leave accrued to cover the shutdown, the employee can be directed to take unpaid leave.
These are potentially dangerous assumptions to make and could result in a breach of Fair Work obligations.
It is important to understand that not all awards/agreements have provision for annual shutdown periods. In a nutshell if it does not state that the employer can direct an employee to take leave during a shutdown period then they cannot do it!
Directing employees to take annual leave during a shutdown period
Where the agreement does allow for employers to direct employees to take leave, the employer must show due process, act in a fair and consistent manner and be aware of:
- Providing the required written notice directing employees to take leave (normally 4 – 8 weeks before the shut-down period)
- If the employee does not have sufficient leave entitlement they will be entitled to additional paid leave
- In the event that that an employee(s) doesn’t have sufficient leave entitlements and unpaid leave is allowable, they may still be entitled to personal and annual leave accrual
- Public holidays will still be payable during a shutdown period
For employees that aren’t covered by an enterprise agreement or a modern award
Employers can only direct the employee to take leave if the direction is reasonable in the circumstances. You must consider:
- The needs of the employee and the business;
- The period of notice given – give reasonable notice of at least 4 weeks
- Whether-or-not the employee has sufficient leave accrued (or is otherwise to be granted leave in advance);
- Whether the employee’s contract of employment (or a company policy) indicates that the business usually shuts down over Christmas; and
- The duration of the shutdown
Time is of the essence
Over the coming week we suggest:
- Employee entitlements are reviewed as outlined in their awards/agreements
- Prepare notices and internal communications for staff
- Provide staff with advanced notice if they will be required to work during the Christmas period if it is not documented elsewhere
Navigating the complexities of the various industrial instruments can be confusing and frustrating. If you act now and prepare, you can have peace of mind and enjoy the festive season.