As the festive season approaches, businesses gear up for temporary shutdowns, a common practice during Christmas and New Year. However, before you get all cozy with the thought of a break, remember that there are crucial updates in Modern Awards that demand attention ― particularly concerning directing annual leaves during these shutdowns.

Also, the changes aren’t exactly hot off the press. They were introduced in December 2022 when the Fair Work Commission addressed unpaid leave during shutdowns. However, as of May 1, 2023, these changes came into effect nationwide, impacting businesses under the governance of the 78 modern awards.

This article looks into these updates, highlighting key points to help you prepare and ensure compliance during the upcoming Christmas shutdown.

What are the changes?

If we had to describe new changes with just one sentence, it would be: focusing on safeguarding employee rights during temporary shutdowns.

Here are key updates you should know about:

  • Notice period requirement: Employers must give all affected employees at least 28 days written notice before a shutdown.
  • Reasonable requirement for annual leave: When employees are requested to take annual leave during a temporary shutdown, it must be justified by the employer, showing how this decision benefits both the business and the employee involved.
  • Flexible notice periods: Most affected employees and the employer can agree on shorter notice periods.
  • Options for insufficient annual leave: In the case that an employee doesn’t have enough saved annual leave for the entire shutdown period, they might use different paid time-offs, take annual leave in advance, or choose to take leave without pay.
  • Payment for public holidays: If a public holiday falls within a shutdown period and aligns with an employee’s usual workday, they’ll receive compensation, even if they’re not required to work on that specific day. 

How to prepare for annual leave directives during the shutdown period?

#1 Plan and communicate

Preparing in advance and maintaining open communication with your teams ahead of the shutdown period is crucial for effectively handling work arrangements. 

This involves setting clear timelines for the shutdown, discussing expectations, and detailing the process for taking annual leave. Hold team meetings, send detailed emails, and ensure open channels for questions and clarification. 

#2 Implement annual leave workplace policies

Workplace policies specifically addressing annual leave can significantly streamline procedures during shutdowns.

They should cover when and how employees can take leave, especially regarding closedown periods. Also, make sure that these policies clarify the process for taking leave in advance and what happens if an employee doesn’t have enough leave saved up for the shutdown (see Options for insufficient annual leave above).

Having rules spelled out helps everyone understand what to expect and ensures a smoother transition into the holiday period.

#3 Ensure compliance with the law and award or agreement

When instructing employees to take annual leave during a shutdown, it’s crucial to adhere to legal requirements and the rules outlined in the award or agreement. This means making sure the directive is fair, documented in writing, and given with the required notice. Look closely at a specific award or agreement details to ensure you follow the proper steps.

Important: If there’s no specific award or agreement, you can only instruct an employee to take annual leave if the requirement is reasonable.

Prepare for the shutdown period ― the right way

Being in business ourselves, we know that getting ready for the year-end hustle can be overwhelming *to say the least*

So, if you’re planning a Christmas closedown and need a hand in managing annual leaves effectively, our team at Fresh HR Insight is here to support you.

Contact us today for guidance on navigating this process smoothly and ensuring everyone heads into the holidays stress-free.

End-of-year holiday season - FACT SHEET

 Managing annual leaves during shutdown

Find out about all the below listed with corresponding links by clicking on the button below

  • New shutdown rules
  • Rules and entitlements during the end-of-year holiday season
  • Modern awards
  • List of awards
  • 4 yearly review of modern awards—Shutdown provisions
  • Difference between unpaid leave and shutdown
  • Annual leave
  • Direction to take annual leave during a shutdown