DFK Gooding Partners

July 10, 2023

Many industry awards currently feature clauses that allow employers to instruct employees to take unpaid leave or utilize leave in advance if they don’t have enough annual leave to cover a temporary shutdown period, such as the Christmas and New Year break.

In August 2022, the Fair Work Commission (FWC) conducted a comprehensive review of these provisions and concluded that 78 awards should be revised to incorporate a model shutdown provision, which will replace the existing shutdown clauses found in those awards.

The rationale behind this change stem from the FWC’s assessment that such provisions are inconsistent with the Fair Work Act. It was deemed unfair for an employer to compel an employee to take unpaid leave during a shutdown period without any requirements for reasonableness, particularly when the employee has no entitlement to request or take leave without pay.

Updates to awards: a summary

New provisions apply from 1 May 2023 for many awards, that now specify:

  1. Employers must provided affected employess with a 28-day notice period,
  2. Reasonableness of requests and the ability to require staff to take Annual Leave or Leave Without Pay, and
  3. What occurs if a staff member does not have a sufficient Annual Leave balance.

If your award allows it, you can direct your employees to take annual leave or in some instances leave without pay:

  • During a temporary shutdown
  • Where the employee has accumulated excess annual leave.

For award free employees there are also some conditions to meet prior to requiring a staff member to take leave (paid or unpaid).

A Temporary Shutdown is different from a Stand Down and will affect entitlements differently and whether ordinary pay is to be maintained or not.

  • Aboriginal and Torres Strait Islander Health Workers and Practitioners and Aboriginal Community Controlled Health Services Award 2020 (clause 22.3)
  • Aircraft Cabin Crew Award 2020 (clause 19.4)
  • Airline Operations–Ground Staff Award 2020 (clause 22.6)
  • Alpine Resorts Award 2020 (clause 25.3)
  • Aluminium Industry Award 2020 (clause 22.4)
  • Ambulance and Patient Transport Industry Award 2020 (clause 22.7)
  • Animal Care and Veterinary Services Award 2020 (clause 22.5)
  • Aquaculture Industry Award 2020 (clause 22.9)
  • Asphalt Industry Award 2020 (clause 21.8)
  • Banking, Finance and Insurance Award 2020 (clause 22.5)
  • Black Coal Mining Industry Award 2020 (clause 24.9)
  • Broadcasting and Recorded Entertainment Award 2020 (clause 18.6)
  • Building and Construction General On-site Award 2020 (clause 31.3)
  • Business Equipment Award 2020 (clause 23.5)
  • Car Parking Award 2020 (clause 24.6)
  • Cemetery Industry Award 2020 (clause 19.3)
  • Cement, Lime and Quarrying Award 2020 (clause 22.8)
  • Cleaning Services Award 2020 (clause 21.4)
  • Clerks—Private Sector Award 2020 (clause 32.5)
  • Coal Export Terminals Award 2020 (clause 20.7)
  • Commercial Sales Award 2020 (clause 20.6)
  • Concrete Products Award 2020 (clause 22.6)
  • Contract Call Centres Award 2020 (clause 22.10)
  • Educational Services (Post-Secondary Education) Award 2020 (clause 22.5)
  • Electrical Power Industry Award 2020 (clause 21.8)
  • Electrical, Electronic and Communications Contracting Award 2020 (clause 21.5)
  • Fitness Industry Award 2020 (clause 21.3)
  • Food, Beverage and Tobacco Manufacturing Award 2020 (clause 25.11)
  • Gardening and Landscaping Services Award 2020 (clause 20.9)
  • Gas Industry Award 2020 (clause 20.7)
  • General Retail Industry Award 2020 (clause 28.4)
  • Graphic Arts, Printing and Publishing Award 2020 (clause 31.12)
  • Hair and Beauty Industry Award 2020 (clause 24.3)
  • Health Professionals and Support Services Award 2020 (clause 26.5)
  • Higher Education Industry—General Staff—Award 2020 (clause 24.4)
  • Horse and Greyhound Training Award 2020 (clause 18.6)
  • Hospitality Industry (General) Award 2020 (clause 30.4)
  • Hydrocarbons Industry (Upstream) Award 2020 (clause 25.7)
  • Joinery and Building Trades Award 2020 (clause 27.9)
  • Journalists Published Media Award 2020 (clause 20.8)
  • Legal Services Award 2020 (clause 22.7)
  • Local Government Industry Award 2020 (clause 23.5)
  • Manufacturing and Associated Industries and Occupations Award 2020 (clause 34.7)
  • Meat Industry Award 2020 (clause 25.8)
  • Mining Industry Award 2020 (clause 22.7)
  • Mobile Crane Hiring Award 2020 (clause 24.6)
  • Miscellaneous Award 2020 (clause 21.4)
  • Nursery Award 2020 (clause 22.12)
  • Nurses Award 2020 (clause 22.7)
  • Oil Refining and Manufacturing Award 2020 (clause 24.6)
  • Pest Control Industry Award 2020 (clause 23.9)
  • Pharmaceutical Industry Award 2020 (clause 21.5)
  • Plumbing and Fire Sprinklers Award 2020 (clause 24.4)
  • Poultry Processing Award 2020 (clause 21.5)
  • Premixed Concrete Award 2020 (clause 22.8)
  • Professional Employees Award 2020 (clause 18.4)
  • Racing Clubs Events Award 2020 (clause 23.5)
  • Racing Industry Ground Maintenance Award 2020 (clause 21.5)
  • Real Estate Industry Award 2020 (clause 20.5(a))
  • Registered and Licensed Clubs Award 2020 (clause 25.4)
  • Restaurant Industry Award 2020 (clause 25.4)
  • Road Transport (Long Distance Operations) Award 2020 (clause 20.4)
  • Road Transport and Distribution Award 2020 (clause 24.9)
  • Salt Industry Award 2020 (clause 23.10)
  • Seafood Processing Award 2020 (clause 21.11)
  • Security Services Industry Award 2020 (clause 21.4)
  • Silviculture Award 2020 (clause 22.5)
  • Storage Services and Wholesale Award 2020 (clause 24.5)
  • Sugar Industry Award 2020 (clause 31.5)
  • Supported Employment Services Award 2020 (clause 32.3)
  • Surveying Award 2020 (clause 22.7)
  • Telecommunications Services Award 2020 (clause 22.9)
  • Textile, Clothing, Footwear and Associated Industries Award 2020 (clause 32.6)
  • Timber Industry Award 2020 (clause 28.10)
  • Vehicle Repair, Services and Retail Award 2020 (clause 29.6)
  • Water Industry Award 2020 (clause 22.4)
  • Wine Industry Award 2020 (clause 24.9)
  • Wool Storage, Sampling and Testing Award 2020 (clause 23.5)

1. 28 Day Notice Period

Asking staff to take annual leave (or leave without pay if they don’t have entitlements) during a shutdown, must be in writing. Affected employees should be given at least 28-days written notice. Notice period may be shorter IF the majority of affected employees and their employer agrees.

Where a new employee is hired or commences within the 28 day notice period, they should be notified as soon as is reasonably practicable.

2. Reasonableness of the request

The written notice must outline the companies reasonable business grounds behind the decision for the temporary shutdown period. The business should also consider the leave balances of the employees in establishing these reasonable business grounds.

3. Insufficient Annual Leave Balances

If an employee does not have enough paid annual leave to cover all the days of the shutdown, the employee and employer can agree to consider:

  • Utilising Time in Lieu or RDO’s
  • Annual Leave in advance
  • Leave without Pay

Permanent employees must be paid for any public holidays that fall on a normal work day during any temporary shutdown period.

An employee will continue to accumulate annual leave during a shutdown period, unless they’re taking leave without pay.

Remember – paying above the Award does not exempt you from the provisions of the Award. Checking your Award and it’s clauses is a great way to ensure you meet your compliance requirements. Not sure if this affects you or do you need a standard letter template to provide to your employees? Give Wendy our Director at GPHR a call, or send a quick email to discuss your requirements further.

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