With the Christmas and New Year break approaching, many businesses are planning their annual shutdown. If you intend to close your workplace, it’s critical to be across the current Fair Work rules to ensure you are compliant and avoid unexpected wage costs.
A “shutdown” is a temporary closure of a business, such as over the festive season. The rules for directing award-covered employees to take annual leave changed in 2023.
– Employers may require an employee to take their accrued paid annual leave during the shutdown, provided the direction is reasonable.
– An employee who does not have enough accrued annual leave to cover the entire shutdown period can no longer be forced to take unpaid leave. The employee must either agree in writing to take Annual leave in advance, Accrued time off (e.g., TOIL or RDOs), or Leave without pay.
If an agreement is not reached, the employee must be paid their ordinary wages for the days not covered by their accrued leave as the employee is ready, willing and able to work.
Employees are entitled to be paid for any public holidays that fall during the shutdown period, provided they would ordinarily have worked on that day. This rule applies even if the employee is on a period of unpaid leave by agreement.
To prepare for your Christmas and New Year shutdown:
- Confirm Dates: Determine your exact closure and re-opening dates.
- Check the Award: Confirm the specific rules, notice period, and requirements of the modern award that covers your staff.
- Check Leave Balances: Review all employee annual leave balances now.
- Issue Notice: Provide the mandatory minimum 28 days’ written notice to all affected employees.
- Manage Shortfalls: Engage with any employee who has insufficient leave to secure a written agreement for leave in advance or leave without pay.
Need Assistance?
Getting the shutdown period and leave correctly managed is vital for compliance and staff relations. We can assist you by checking leave balances, drafting payslips and entering/confirming leave requests.
Read up on the rules for yourself
https://www.fairwork.gov.au/newsroom/news/new-shutdown-rules-for-awards?
Reach out to us today so we can review your payroll and assist with your shutdown planning.
