Do you shut your business over the Christmas and New Year period? Do you employ staff? Do you know what is involved when dealing with staff and Christmas Shutdown? If you do have staff and you also shut your business down for a period of time over the Christmas and New Year period then you need to be aware of a few things.
Can I make my staff member take leave?
This is the most common question I get at this time of year. And the simple answer is yes. You, the Employer can direct your staff to take annual leave during a shut down (it doesn’t have to be the Christmas period) if the award or registered agreement they are working under allows it.
Most awards allow for you to direct your staff to take leave during a period of time during a shut down. They have rules about how and when you can direct an employee to take leave, but it is all pretty straight forward.
If you are unsure if your award allows this to happen Fairwork have an awesome quick look up page. If you go to – here – then it will take you to the page and you just put in the industry you are in and the sub-industry and it will tell you what award you are to be using and what are the directions for directing an employee to take annual leave. It is quite handy.
If for some reason an award or an agreement doesn’t cover your business then you can direct your staff to take leave, if the leave is reasonable.
What notice do I need to give my staff about shutdown leave?
Most commonly you are required to give your employees 4 weeks notice that they will need to take annual leave, but some awards state 2 months. Once again, go to the Fairwork quick look up page for details on your award.
You are also required to give the notice in writing. Fairwork have a great template for notice of leave. You can get it here.
What happens if my staff member doesn’t have enough annual leave to cover the shutdown period?
If your staff member doesn’t have enough accrued leave to take during a shutdown period, then you need to go back to the Fairwork quick look up page and see what the directions are under your award.
Some awards state that you are entitled to pay them leave in advance of their accrual (basically putting them into a negative annual leave figure) or request that they take unpaid leave for some or all of the time, but if they refuse to take unpaid leave then you must pay them their normal hourly rate for any time not covered by annual leave.
Other awards state that they use up their accrual and then take unpaid leave for the rest of the break. So make sure that you check out the Fairwork quick look up page for your awards rulings.
What if my award or agreement doesn’t have rules about shutdowns?
You cannot direct your employees to take leave if there are no rules within your award or agreement relating to annual leave during shutdowns.
However, you and your staff can come to an agreement that the staff member takes annual leave and/or unpaid leave (if needed) during a shutdown period. If you cannot come to that agreement, then you cannot force the staff member to take unpaid leave and therefore you will have to pay them ordinary pay for that time.
Do my staff still accumulate annual leave during shutdown?
Once again the best place to answer this question is on the Fairwork quick look up page, as some awards state that annual leave is only still accrued on paid leave and other awards state that annual leave will continue to accrue while on leave during a shutdown period, which means that it accrues on the unpaid portion of the leave as well.
What happens if there are public holidays during the shutdown period?
If a public holiday falls during an employees annual leave, they are paid at ordinary times for that day and not annual leave. This also means that their annual leave balance does not change for this day.
Here is what the Christmas/New Year period will look like for your pays.
Lets say your staff member works Monday to Friday and the Christmas shut down starts on Wednesday the 23rd of December. Their pay for that fortnight will look like the following:
21st Normal Pay
22nd Normal Pay
23rd Annual Leave
24th Annual Leave
25th Normal Pay
28th Normal Pay
29th Annual Leave
30th Annual Leave
31st Annual Leave
1st Normal Pay
They don’t get paid for weekends when they normally work, so even though the public holiday falls on the Saturday for Boxing Day, they will not be paid for this. So for the 2-week period of shutdown, they would use up 5 days of annual leave.
Please note that this is only for if your business is on Christmas shutdown, if your business does not close your pays will be different from this.
What happens if some staff work during shutdown?
If you keep a skeleton staff on or some staff have to come in to do one or two things to keep things running during shutdown, then they will be paid as normal. If they happen to work on a public holiday they will get paid for public holiday rates.
I hope that you are all organised for your shutdown period and you are getting excited about the coming Christmas/New Year Celebrations. 🙂