Christmas shutdown basics for Employers in 2024

If your business is eagerly anticipating some down time over the 2024/25 Festive Season, whether or not you can require your employees to use their annual leave during the temporary shutdown period will depend on a number of factors, including how much annual leave an employee has accrued; whether a Modern Award applies or not; and, what the relevant Modern Award provides, if one applies to the employee.

Adding to the confusion is the fact that in 2023, the Fair Work Commission elected to overhaul the annual leave clauses in all Modern Awards, meaning some employers may still be unfamiliar with the standardised rules that govern the taking of annual leave during a temporary shutdown.

Award/Agreement-Free Employees

If your employee is not covered by a Modern Award or Enterprise Agreement, section 94(5)(b) of the Fair Work Act 2009 (Cth) (the Act) applies. It states that an employer may compel an award-free or agreement-free employee to take a period of paid annual leave provided the requirement is “reasonable”. Fortunately, the Act provides examples of when the requirement to take a period of paid annual leave may be reasonable, and this includes a situation where the business is being temporarily shut down over the Christmas to New Year period. Providing employees with sufficient notice (e.g. 4 weeks or more) would also be appropriate in these circumstances.

Employees Covered by a Modern Award

If your employee is covered by a Modern Award, the taking of leave during a Christmas shutdown will be addressed in some, but not all, instances.

The Award DOES have a Christmas shutdown provision

As of May 2023, all Modern Awards that contain an annual leave shutdown clause now reflect the same provisions, with the exception being the amount of notice an employer must provide employees of when a temporary business closure is to occur. Most awards require as little as four weeks’ notice be observed but a small number obligate the employer to give as much as three months’ notice. A lesser period of notice may be observed by agreement between the employer and employee.

Where a Modern Award permits an employer to temporarily close their operations (or a part or section of their operations) for Christmas/New Year, full-time and part-time employees may be required to use their accrued annual leave during the shutdown period. Employees who do not have sufficient annual leave accrued to cover the closure period may take annual leave in advance, or unpaid leave, by agreement.

The Award DOES NOT have a Christmas shutdown provision

If the award does not have a provision allowing the employer to direct staff to take annual leave during a temporary closure period, then an employer may request  or offer that employees take the time off as paid annual leave, annual leave in advance or unpaid leave.  However, in this instance, the employer has no power to direct an employee to take leave during the period.

Most employees are unlikely to want to work over the Festive Season and will be happy to take leave, by agreement, but where an employee indicates they would prefer not to have time off, employers will need to devise an alternative solution (such as making work available that is safe for them to perform) to accommodate the employee during the period.

ES Can Help

Employer Services can assist employers in understanding the correct procedures for implementing a Christmas shutdown and can advise on any annual leave questions which arise as a consequence.  Subscribers can contact us on (07) 3220 3500 or try live chat for on-the-spot assistance.

Not a Subscriber? Consider the extensive benefits annual subscription to Employer Services can offer your business here.