Employers and employees need to start planning how their businesses will operate during the end-of-year holiday season.
Many businesses get busier this time of year and may need their employees to work more hours and on public holidays. Other businesses may shut down (also known as a ‘close down’) or reduce their staff numbers.
Find out about the rules and entitlements during the end-of-year holiday season that may affect you.
Requiring annual leave during a shutdown
There are different rules that apply during a shutdown depending on what covers an employee.
Agreement or award employee
An employer can direct their employees to take annual leave during a shutdown if their award or registered agreement allows it.
Most awards have rules about how and when an employer can direct their employees to take annual leave.
In most cases, the direction to take annual leave during a shutdown must be:
- reasonable
- in writing
- given to affected employees within the required notice period.
Some awards allow employers and a majority of affected employees to agree on a shorter notice period for a shutdown direction.
An award may also provide that a business can only close during certain periods, such as the end-of-year period.
Many awards have clauses about annual leave during shutdowns. Each award and agreement is different, so employers should check theirs to make sure before they give employees any directions to use annual leave.
Award and agreement free employees
If no award or agreement applies, employers can only direct the employee to take annual leave if the direction is reasonable.
Employees without enough annual leave to cover a shutdown
If the award or agreement allows it, employees can agree with their employer to take:
- annual leave before they’ve accrued it
- unpaid leave.
Awards and agreements without shutdown rules
Employers can’t direct their employees to take annual leave during a shutdown if their award or agreement doesn’t have rules allowing the direction.
However, employees can agree with their employer to take annual leave (including before they’ve accrued it) or unpaid leave during the shutdown.
Working during a shutdown
If an employee continues to work when a business shuts down, they should receive their normal pay.
If there is a public holiday during the shutdown, employees should still be given the day off without loss of pay, or they should be paid the public holiday rates under their award or agreement if they work.
Working overtime or on a public holiday
Employers can ask their employees to work overtime or work on public holidays if the request is reasonable. An employee can refuse a request to work if they have reasonable grounds.
When requesting that an employee work on a public holiday, employers need to consider all relevant circumstances. Whether a request is reasonable depends on several things, including:
- the needs of the business
- the role and responsibility of the employee
- the employee’s personal commitments, like family or caring arrangements
- how much notice the employee gets about the extra hours
- what the employee’s contract says.
If an employee works overtime or on a public holiday, their award or registered agreement may give them additional entitlements such as:
- penalty rates
- a different day off
- extra annual leave.
Paying employees who don’t work on a public holiday
Employees should be given the choice to work on a public holiday or not.
When a public holiday falls on a full-time or part-time employee’s usual work day, employers need to pay them their base pay rate for the ordinary hours they would have normally worked. This applies even when an employee is on paid annual leave during a shutdown.
The minimum pay rate doesn’t include any loadings, overtime or penalty rates that they usually get for working that day. An employee’s roster can’t be changed to deliberately avoid this payment.
