Annual close down: how to get it right

Analysis

Annual close down: how to get it right

Planning to shut down over the Christmas/New Year period? Paul Munro explains how to cruise through the festive season.

Planning to shut down over the Christmas/New Year period? It's never too early to start planning.

The conditions relating to an employer’s right to send employees on an annual close down will depend on the applicable modern award or enterprise agreement or, in the case of an award/agreement free employee, the National Employment Standards.
 
An employer is usually required to give at least a specified period of notice to close a business for a period of annual leave. Business close downs are common over the Christmas-New Year period because business suppliers or clients are also closed for business, or most staff want to take annual leave during this period.

The following information is provided to assist those employers who may be contemplating a close down over the Christmas-New Year period for 2018-19.

Modern awards


Most awards contain terms which allow employers to send employees on an annual close down. This is usually subject to an employer giving affected employees at least four weeks’ notice, although an award may require a greater period of notice. For example, the Textile, Clothing, Footwear and Associated Industries Award 2010 requires an employer to give at least three months’ notice of a close down.

Some awards provide that the same close down conditions that apply to most employees in the establishment will apply to employees under that award. 
 
If a modern award does not contain a provision regarding annual close down, an employer cannot direct employees to take annual leave as an annual close down. The Fair Work Act (s88) states that paid annual leave may be taken for a period agreed between an employee and an employer. This means an employer must obtain the agreement of each affected employee for a close down to occur.

A prospective employee should be advised at the time of recruitment that he/she may be required to take annual leave during the company’s annual close down. This may influence a prospective employee’s decision whether or not to accept employment with the company.

Award/agreement free employees


The Fair Work Act (s94(5)) provides that an employer may require an award/agreement employee to take a period of paid annual leave, but only if the request is reasonable. Section 94(5)(b) provides examples of a reasonable request by an employer, including the employer’s enterprise being shut down for a period, e.g. Christmas and New Year.
Matters that can be agreed between an employer and an award/agreement free employee include:
  • that paid annual leave may be taken in advance of accrual (when the period of the close down exceeds an employee’s annual leave accrual)
  • that a specified period of notice must be given before taking annual leave, e.g. four weeks’ notice, and
  • the form of application for paid annual leave.

Public holidays 


The Fair Work Act (s115) lists a schedule of days prescribed as a public holiday for the purpose of the National Employment Standards.

These provisions apply in conjunction with the public holidays declared under the relevant state or territory public holiday legislation. As mentioned previously, the Fair Work Act provides that if a public holiday falls during a period of annual leave (such as an annual close down), an employee is taken not to be on annual leave where the public holiday falls on a day the employee usually is required to work.

The various public holidays over the Christmas-New Year period are:
  • Christmas Eve (7pm-midnight) (South Australia only) – Monday 24 December 2018
  • Christmas Day – Tuesday 25 December 2018 (all states and territories)
  • Boxing Day – Wednesday 26 December 2018
  • New Year’s Eve (7pm-midnight) (South Australia only) – Monday 31 December 2018
  • New Year’s Day – Tuesday 1 January 2019 (all states and territories)
  • Australia Day – Monday 28 January 2019 (all states and territories)

Other periods of paid leave


Under the Fair Work Act (s89(2)), if the period of a close down for annual leave includes a period of any other paid leave, such as a public holiday, personal/carer’s leave, compassionate leave or community service leave, an employee is not taken to be on paid annual leave for the period of the other leave. This provision applies to paid leave entitlements under the National Employment Standards.

Long service leave


A state or territory long service leave statute will usually provide that a period of long service leave and paid annual leave cannot be taken concurrently. Therefore, if an annual close down coincides with an employee’s absence on long service leave, the employee is deemed to be absent on long service leave and not paid annual leave. 

Christmas School holidays


The following are the Christmas school holiday dates for 2018-19 for government schools for each state and territory. A private school may have different commencement and finishing dates. The dates provided are inclusive.
  • Australian Capital Territory: Saturday 22 December 2018 – Monday 4 February 2019
  • New South Wales: Saturday 22 December 2018 – Tuesday 29 January 2019
  • Northern Territory: Friday 14 December 2018 – Monday 28 January 2019 (urban schools only)
  • Queensland: Saturday 15 December 2018 – Monday 28 January 2019
  • South Australia: Saturday 15 December 2018 – Monday 28 January 2019
  • Tasmania: Friday 21 December 2018 – Tuesday 5 February 2019
  • Victoria: Saturday 22 December 2018 – Tuesday 29 January 2019
  • Western Australia: Friday 14 December 2018 – Sunday 3 February 2019
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