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Many businesses have a period of close down between the Christmas and New Year periods. For those businesses intending to close down over the Christmas period we recommend you ensure the following issues are covered:

1. Modern Awards

Make sure that all Modern Awards covering your employees contain terms permitting your business to implement a close down. Most Awards do contain such terms, however there are several that don’t actually permit a business from directing its employees to take annual leave during such a period.

2. Award Entitlements

In the absence of such an express provision within a relevant modern Award, the business may not be entitled to direct an employee to take annual leave.

3. Sufficient Annual Leave

Further, some Awards state that if an employee has insufficient annual leave they are entitled to be paid leave in advance, while other Awards state the annual close down period can be unpaid if the employee has accrued insufficient annual leave.

4. Notice Period

Most Awards containing close down provisions require the employer to provide employees with not less than four weeks’ notice of their intention to have such a close down period. We highly recommend reviewing any relevant Award terms covering the issue of close down so as to determine rights and obligations.

5. Reasonable

An employer is entitled to direct Award free employees to take annual leave so long as the direction is considered “reasonable”. Given the rest of the business is closed during that period it generally seen as reasonable to direct the Award free employee to also take annual leave during that close down period.

6. Notify

Right now is a great time to send out a memo or letter to employees advising them of any close down period the business will be recognising and that the employee will be required to take annual leave during that period. Ensure each employee receives a copy.

7. Content

Such a memo to employees should contain the start and finish dates of the close down period, as well as stating that the period will be considered as annual leave and paid accordingly (i.e. deducted from accrued annual leave).

8. Communicate

You may also wish to communicate to employees that the annual leave days will be separate from the public holidays during that period and will not remove or replace their entitlement to public holidays during that period.

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