Business shutting down over Christmas and New Year?

Business shutting down over Christmas and New Year?

(Source: © Fair Work Ombudsman)

The end of 2016 is fast approaching and it’s time to start thinking about what happens over Christmas and New Year.  Many businesses often shut down or run on skeleton staff over the Christmas and New Year period.  How employees are paid over this period depends on the award or agreement that they’re covered by and whether they’re working or on leave.

Fair Work has provided a handy guide below to help:

Directing an employee to take annual leave

An employee can be directed to take annual leave during a shut down if their award or registered agreement allows it.

Most awards have rules about how and when an employer can direct an employee to take leave. For example, an employer may need to give the employee a set amount of notice (eg. 4 weeks) that they will need to take annual leave.

Find out if your award allows an employer to direct an employee to take annual leave over Christmas and New Year on Fair Work’s Direction to take annual leave during a shut down page.

If an employee isn’t covered by an award or an agreement, their employer can direct them to take annual leave if the direction is reasonable.  Read more on Fair Work’s award and agreement free wages and conditions page.

What if an employee doesn’t have enough annual leave to cover the shut down period?

If the award or agreement provides for it, an employer can direct an employee to take annual leave in advance of accrual, or unpaid leave for some or all of the time.

Check if your award says this on the Direction to take annual leave during a shut down page.

What if an award or agreement doesn’t have rules about shut downs?

If your award or agreement doesn’t have rules about annual leave during shut downs, an employer can’t direct an employee to take leave.

However, an employer and employee can agree that the employee takes annual leave (including in advance of accrual) or unpaid leave for the shut down time. The employee can’t be forced to take unpaid leave, so if an agreement can’t be reached with their employer, they need to be paid their ordinary pay for the time.

Find out more about taking annual leave in advance.

What happens if a public holiday falls during an employee’s annual leave?

If a public holiday falls during an employee’s annual leave, they need to be paid for the public holiday, not annual leave. This means that an employee should be paid their base pay rate for the day, it shouldn’t be taken off their annual leave balance.

See Not working on public holidays for more information.

Working during a shut down

If employees continue to work when a business shuts down, for example skeleton staff, they should be paid as normal. If any of the days are public holidays, these days are treated as public holidays – i.e. the employee should be given the day off without loss of pay or they should be paid public holiday rates as per their award or agreement.

See Working on public holidays for more information.

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