Wendy Jeffery-Lonnie

October 9, 2023

Amongst the raft of changes made to the industrial relations laws in the past 18 months, a model clause has been added to Awards which specifically addresses ‘temporary shutdowns’. In this article, GPHR Director Wendy Jeffery-Lonnie provides a summary of the key takeouts you need to be across when planning for your Christmas shutdown for 2023.

A shutdown under the model clause is where the employer intends to temporarily shutdown all or part of its operations and want affected employees to take annual leave during that period. A timely example of this is Christmas closedowns where a business closes their workplace between Christmas and New Year. If you intend to close your business between Christmas and New Year (or indeed at any other time of the year) there are a few things to consider in order to comply with the new Award clauses.

The shutdown clauses apply to your business if:

  • Your worker falls under a modern award, and

  • Your affected workers are being asked to take paid annual leave during that period, and
  • You intend to shut down all or part of your operation for a temporary period, and

Businesses planning to close between Christmas and New Years must:

  • Give the affected workers 28 days written notice

  • If an employee commences employment at your business after notice is given, they must be given notice as soon as reasonably practicable. (I suggest that it is also raised in interview)
  • The notice must be in writing (just having a clause in your employment contracts or employee handbooks or because you have always closed over Christmas is no longer enough)
  • The employer may direct the employee to take annual leave under the provisions of these clauses.
  • The period of shutdown must be ‘reasonable’. This is an undefined term in the legislation but would take into account normal business and industry practices.

Where the employee does not have sufficient leave accruals, the following options are available:

  • Annual Leave in advance may be provided on agreement, taking into account any leave that may be accrued during the shutdown period.This agreement should be in writing. In this document you should clearly state that the employee will be required to pay any advance leave back should they terminate their employment (or be terminated) prior to the leave accruals being replenished.
  • The employee and the employer may agree to taking Leave Without Pay (LWOP) some or all of the shutdown period

There are also award clauses regarding requiring staff to take annual leave where they have excessive balances (over 8 weeks). These award clauses do not apply to a temporary shut down as described above.

Key Dates

  • If you are closing your business on the Friday before Christmas day … you will need to supply your staff with notice (in writing) by 22nd November to meet the 28 day requirement.

Are you unsure about managing leave?

Do you have a workplace scenario that is unique? For different strategies to suit your specific business requirements, please contact Wendy Jeffery-Lonnie (GPHR Director) at wendy@gphr.com.au for practical advice and support.

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