Direction to take leave ‘okay’: agreement prevails

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Direction to take leave ‘okay’: agreement prevails

Annual close-down is a common occurrence in many industries. In this case, the employer was given a broad power in its enterprise agreement to order a close-down, and the provision was upheld against union protests.

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Annual close-down is a common occurrence in many industries. In this case, the employer was given a broad power in its enterprise agreement to order a close-down, and the provision was upheld against union protests.
 
The Federal Circuit Court ruled that the provisions in the agreement allowing the employer to direct employees to take leave as long as certain conditions were met did not breach the National Employment Standards.

[Full text of this caseUnited Voice v Valspar (WPC) Pty Ltd [2013] FCCA 1437 (27 September 2013)]

Background to this case

A paint manufacturer ordered staff onto annual leave when it scaled down production to reduce stocks. It reduced a nine-day fortnight to an eight-day fortnight, for an eight-week period starting in May 2012.

A similar roster was put in place for a further eight-week period beginning in July 2012.

Justice Simpson said the employees were understandably unhappy about being required to take short holidays rather than being able to take larger block holidays; however, this did not mean the employer had acted wrongly.

Direction was legitimate

The court said the company was allowed under the enterprise agreement to direct the employees to take leave in the way it did.

The court rejected each of the union arguments in relation to the legislation being breached. Alleged breaches of sections 44, 50 and 88 of the Fair Work Act 2009 were found not to exist.

There was no evidence from the applicant that the respondent failed to give proper notice.

Message: Employers are entitled to implement a close-down as long as there is a legitimate provision allowing this. Generally, a modern award or enterprise agreement will allow an employer to close down for annual leave purposes.

 
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