Employees can determine when they want to take their accrued annual leave and employers cannot unreasonably refuse annual leave. However, as many businesses begin temporarily closing during the Christmas period, this may change. The Fair Work Commission recognises businesses temporarily close during the holiday period as business activity slows. Employers can direct employees to take annual leave during the Christmas period only under an Employment Award (‘EA’) or registered Agreement. Also, an employer must provide reasonable directions to their employees as set out in their registered Agreement or EA. Alternatively, employers must give reasonable directions, even if their employee is not covered by an award or EA. Your business may be liable if these directions do not follow the requirements under the registered award or EA. This article will help you better understand how the shutdown period may affect you and your business.
What should you do to properly inform your employees before the Christmas period?
Employers can look to the relevant Award or EA to determine how directions should be provided to employees. It is also important to note that company policy or an employee’s Employment Contract may provide additional guidance. The Fair Work Commission requires directions must be reasonable, when directing employees to take annual leave during the shutdown period. This requirement also applies to employees not covered by an award or agreement. For example, an award or EA may require 3 weeks notice to notify employees to take annual leave during shutdown. Employers need to strictly follow the instructions provided in the registered Award or EA with their employees. An employee cannot be forced to take annual leave during the Christmas period if there is no registered award or EA in place.
What should I do if my employee is not covered by a relevant Award or Enterprise Agreement?
An employer may enter a mutual agreement with their employee to take annual leave during the shutdown period. Determining whether this is on a paid or unpaid basis is up to the parties to agree. However, the directions to take annual leave must be reasonable. Employers must ordinarily pay their employee if the employer and employee cannot reach an agreement.
What if my employee does not have enough annual leave accrued during the Christmas period?
Employees who do not have enough annual leave accrued may choose to take annual leave in advance or nominate unpaid leave as an option. However, this will depend on the terms of the registered Award or EA. For example, a new employee has started working in the company in late November and may not have enough annual leave accrued. Generally, the first place to look is what does the registered award or EA say? Following this, employers should follow the relevant instructions as provided and take all steps necessary to ensure they comply with Fair Work obligations. An employer and employee can mutually agree how annual leave is taken during the Christmas period, if there is no award or EA in place.
Employers must provide reasonable directions to their employees when annual leave is taken during the Christmas period. If you are in doubt, we suggest you to consult with one of our Employment Lawyers to better understand your obligations during the Christmas period under Fair Work regulations.