By Renae Withoos

As an employer it is important to be aware of the new workplace shutdown rules in Australia, affecting 78 modern awards from 1 May 2023. These changes relate to an employer’s ability to direct employees to take a period of annual leave during a shutdown. Here’s what you need to know and what you can do to ensure you comply with the new rules.

What is a shutdown?
A shutdown is a temporary closure of a business during quieter periods, such as Christmas and New Year.

What has changed?

  • Employers must give at least 28 days written notice of the temporary shutdown period to all impacted employees.
  • Employers can direct employees to take annual leave during a temporary shutdown period, but the directive must be reasonable and in writing.
  • Employers can no longer direct employees to take leave without pay during a temporary shutdown period.
  • An employee who doesn’t have enough annual leave to cover the whole period can make an agreement with their employer for other options, such as accrued time off, paid annual leave in advance, or leave without pay.
  • Periods of annual leave taken for temporary shutdown do not count as part of the existing excessive leave provisions in modern awards.
  • The employee will be paid for any public holidays during the shutdown period that fall on days they would normally work.

Why has it changed?
The Fair Work Commission (FWC) changed the clauses because they found that the existing clauses allowed employees to take leave without pay in circumstances where they hadn’t accrued enough paid annual leave to cover the shutdown period, which is not supported by the National Employment Standards or any modern award. The FWC also found that the previous clauses created an undefined entitlement to leave without pay.

Who do the changes apply to:
These new rules apply to employees and employers covered by the 78 affected awards. To access a list of the awards the changes apply to, please click HERE.

What does it mean for employers?

To avoid disputes or issues, employers should take note of the new rules adjust their policies to suit. Here are some steps they can take:

  • Check if their relevant award is one of the 78 modern awards impacted by the decision.
  • Give employees at least four weeks written notice before a shutdown period. The notice should include the start and end dates of the shutdown.
  • Review procedures and guidelines governing or mentioning annual shutdowns and update any material relating to award-covered employees impacted by the changes.
  • Update employee management software and systems to ensure employees can access leave in advance and that their annual leave entitlements are properly accrued and accounted for.


Integrated Human Resourcing is an outsourced HR firm based in Burleigh Heads, Gold Coast.  As human resource specialists, we work closely with your business to understand your needs and to ensure ongoing business success. If you would like to know more, or need assistance with Modern Awards, working conditions or pay rates, email: info@humanresourcing.com.au or call us 5613 1846.