It’s that time of year again when employers need to start planning how their businesses will operate during the end-of-year holiday season, if they have not already done so.

Many businesses get busier and may need their employees to work more hours and on public holidays. Other businesses may shut down (also known as a ‘close down’) or reduce staff numbers.

Whatever the case, business owners need to plan ahead and look at working arrangements to ensure operations run smoothly.

Employees who require employees to take annual leave during a shutdown

An employer can direct their employees to take annual leave while the business has shut down if their award or registered agreement allows it. Most awards have rules about how and when an employer can direct their employees to take annual leave. In most cases, the direction to take annual leave during a shutdown must be:

  • Reasonable
  • In writing
  • Given to affected employees within the required notice period

Some awards allow employers and a majority of affected employees to agree on a shorter notice period for a shutdown direction. An award may also provide that a business can only close during certain periods, such as the end-of-year period.

Many awards have updated clauses about annual leave during shutdowns. Each award and agreement is different, so it is important that employers check prior to directing any employees to use annual leave.

If no award or agreement applies, employers can only direct the employee to take annual leave if the direction is reasonable.

Employees without enough annual leave to cover a shutdown

If the award or agreement allows it, employees can agree with their employer to take:

  • Annual leave before they have accrued it
  • Unpaid leave

What about Awards and agreements without shutdown rules?

Employers cannot direct their employees to take annual leave during a shutdown if their award or agreement does not have rules allowing the direction. However, employees can agree with their employer to take annual leave (including before they’ve accrued it) or unpaid leave during the shutdown.

Employees who work during a shutdown

If an employee continues to work when a business shuts down, they should receive their normal pay. If there is a public holiday during the shutdown, employees should still be given the day off without loss of pay, or they should be paid the public holiday rates under their award or agreement if they work.

Working overtime or on a public holiday

Employers can ask their employees to work overtime or work on public holidays if the request is reasonable. An employee can refuse a request to work if they have reasonable grounds. When requesting that an employee work on a public holiday, employers need to consider all relevant circumstances.

Whether a request is reasonable depends on several things, including:

  • The needs of the business
  • The role and responsibility of the employee
  • The employee’s personal commitments, like family or caring arrangements
  • How much notice the employee gets about the extra hours
  • What the employee’s contract says

If an employee works overtime or on a public holiday, their award or registered agreement may give them additional entitlements such as:

  • Penalty rates
  • A different day off
  • Extra annual leave

Paying employees who don’t work on a public holiday

When a public holiday falls on a full-time or part-time employee’s usual work day, employers need to pay them their base pay rate for the ordinary hours they would have normally worked. This applies even when an employee is on paid annual leave during a shutdown. The minimum pay rate does not include any loadings, overtime, or penalty rates that they usually get for working that day. An employee’s roster cannot be changed to deliberately avoid this payment.

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