We’re often contacted about this topic at this time of the year so before you pack your bags, shut the doors of your business and head off on that long awaited Christmas holiday, you might want to consider the following FAQ’s:
What is a shut down?
A shut down is when a business, or part thereof, temporarily closes during slow periods of the year, such as Christmas and New Year. It is also called a 'close down'.
Do I have to pay my employees during the shutdown?
Full-time and part-time employees have to be paid their usual wages unless their award or agreement says otherwise.
Casual employees don’t have to be paid during shut downs.
Can I tell my employees to take their annual leave when we shut down?
It depends on the Award or Registered Agreement your employee/s are covered by.
If the award or agreement says you can tell your employees to take leave then you’re allowed to. Make sure you follow any rules it has about notifying staff and what should happen during the shutdown.
If your award or agreement doesn’t say anything about shut downs or directions to take leave, you can’t force employees to use their leave. You can negotiate with them to take paid or unpaid leave but if they don’t agree you can’t force them.
If your employees aren’t covered by an award or enterprise agreement, you can direct them to take leave if the direction is reasonable. Make sure you follow any terms in the employee’s employment contract that deal with leave requirements for a shut down.
What if an employee doesn’t have enough annual leave to cover the shutdown period?
This will depend on your award or agreement.
Some awards and agreements will say that employees who don’t have enough annual leave to cover the shutdown get unpaid leave for the period. For example, the Manufacturing and Associated Industries and Occupations Award says:
An employee who has not accrued sufficient annual leave to cover part or all of the close down, is allowed paid leave for the period for which they have accrued sufficient leave and given unpaid leave for the remained of the closedownIf your award or agreement doesn’t have rules about this, you can ask the employee to take:
- unpaid leave, or
- annual leave in advance (as long as the award or agreement doesn’t prohibit it).
If the employee doesn’t agree to take unpaid leave or leave in advance, they’re entitled to be paid their usual wages for the period.
What happens if a public holiday falls during an employee’s annual leave?
If an employee is on annual leave and Christmas Day, Boxing Day or New Year’s Day fall during that time, those days are treated as public holidays – not annual leave days.
This means that the employee should be paid their base rate of pay for the day, and the day shouldn’t be taken off their annual leave balance.
Note, South Australia also has a part-day public holidays from 7pm to midnight on:
- Christmas Eve – Wednesday 24 December
- New Year’s Eve – Wednesday 31 December.
Direction to take annual leave under an agreement
If you’re covered by a registered agreement, check the terms of your agreement for information about when an employee can be directed to take annual leave during a shut down.
What are the Official Christmas and New Year Public Holidays?
This table sets out the relevant public holidays for the Christmas and New Year Period 2017/2018 in Australia:
If you have queries that we haven't covered here, please contact us:
P: 0406 146 116