Navigating the Christmas Shutdown Period: Leave Requests and Employer Obligations

Introduction

As we head towards the end of the year, many businesses are preparing to close or reduce their operations for the Christmas shutdown period. The Christmas shutdown period often refers to the period between Christmas Eve (24 December) and New Years Day (1 January), although these dates may vary for each business.

For employees, this time it is an opportunity to take time off by taking advantage of the multiple public holidays and by using their accrued annual leave.

However, there are several legal requirements surrounding a business’ Christmas shutdown period and an employee’s right to take or be directed to take leave. These requirements largely depend on the employee’s contract, applicable modern award or enterprise agreement and the Fair Work Act 2009 (Cth).

Christmas Shutdown Period

Many businesses will shutdown over the Christmas period and may require their employees to take annual leave at this time. Whether a business can direct an employee to take their accrued annual leave for the shutdown period depends on their employment type (i.e. they need to be a permanent employee as usually only permanent employees are entitled to annual leave), the terms of their contract and whether a modern award or enterprise agreement applies.

Most modern awards and enterprise agreements include clauses relating to shutdown periods. Typically (subject to the specific award or enterprise agreement), employers can direct employees to take annual leave during a shutdown period, provided they are given reasonable notice. The required notice period varies between awards but is typically 4 weeks. If the correct process is followed, employees cannot typically refuse such a direction from their employer.

If an employee does not have enough annual leave for any shutdown period, an employer may allow or require them to take unpaid leave, depending on any other provisions within their applicable modern award or enterprise agreement. If an award does not allow an employee to take unpaid leave for the shutdown period, the business may need to allow the employee to work (if possible) or consider other options such as providing time off in lieu or allowing a negative leave balance to accrue.

Importantly, requiring staff to take unpaid leave without supporting clauses in the applicable award, this may constitute a breach of an employer’s obligations under the Fair Work Act 2009 (Cth).

As for award or agreement free employees, employers can direct them to take annual leave during a shutdown period, if that direction is considered reasonable. This is likely to include a Christmas shutdown period but may vary depending on the industry and the employee’s contract.

Generally, if there are no specific provisions with an employee’s award, enterprise agreement or employment contract, the business should reach mutual agreement about the employee taking leave during the shutdown period.

Leave Requests Around the Shutdown period

The final few months of the year can be a challenging time for employers to manage leave requests. This is a popular time of the year to take leave and if this is not managed properly, a business can suffer staff shortages.

To manage leave requests from employees fairly and legally, a business should:

1. Have clear written leave policies and procedures;
2. Apply the relevant leave policy consistently to avoid claims or perceptions of preferential or unfair treatment;
3. Engage with the employee and communicate clearly about the business’ needs and how leave will be prioritised. Examples of how leave may be prioritised include requests made on a “first-in, best dressed” basis or on a rotating system; and
4. Set deadlines for leave requests and remind employees to submit Christmas leave requests in advance.

Conclusion

The Christmas shutdown period requires careful planning and compliance with workplace laws. Employers should begin to review the relevant modern awards and enterprise agreements that apply to their employees and their employment contracts to ensure they are meeting their legal obligations.

If a business provides the requisite notice, applies clear and consistent leave policies and communicates openly with staff, businesses should be able to manage the Christmas period smoothly and in compliance with Fair Work Act 2009 (Cth).

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