It’s that time of the year already and those businesses having annual close-down periods over the Christmas and New Year need to ensure they have their ducks in a row. We recommend you consider the following points.
Right to implement
Although most Awards contain close-down related terms, several don’t permit a business from directing employees to take annual leave during such a period. In the absence of an express provision within a relevant Award, the business may not be entitled to direct an employee to take annual leave and may need to otherwise reach an agreement with those employees.
Some Awards state that if an employee has insufficient annual leave, they are entitled to be paid leave in advance. Other Awards state the annual close-down period can be unpaid if the employee has accrued insufficient annual leave.
Notice requirement
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 recommend reviewing any relevant Award terms covering the close-down issue so as to determine rights and obligations.
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 would generally be seen as reasonable to direct Award free employees to also take annual leave during a close-down period.
Workforce planning
If your business is open throughout the Christmas/New Year period, start planning your labour requirements and how to fairly juggle annual leave applications from employees.
Start planning and communicating now
Right now is the best time to prepare and distribute a memo to your employees advising them of any close-down period and that the employee will be required to take annual leave during that period. Ensure each employee receives a copy.
The 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).
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. This is often a point of misunderstanding with employees.
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