HomeBlogUncategorizedI know it’s early…but we need to talk about annual Shutdowns

I know it’s early…but we need to talk about annual Shutdowns

  • September 4, 2023
  • Posted by: NorgayHR
  • Category: Uncategorized
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What’s Changed:

Effective 1 May 2023, some changes to the rules for implementing a shutdown period, such as the Christmas shutdown, came into place.

As many of our clients do close over the Christmas period we wanted to provide you with sufficient notice to prepare for this year’s shutdown.

In summary, the main changes are;

  • Employers need to provide 28 days’ notice, in writing, prior to the shutdown taking place. For new employees onboarded within those 28 days, you should advise as soon as possible preferably through the recruitment process.
  • The main change to be aware of is this: employers are only allowed to enforce a shutdown to employees with sufficient annual leave accrued to cover the period as “paid” annual leave.
  • For employees with insufficient annual leave accrued, the employer can request for a mutual agreement with the employee, to either take unpaid leave OR take leave in advance. Any agreement reached should be in writing.
  • In the event it is agreed for the employee to take the leave in advance the written document should include a provision that IF the employee leaves their employment for any reason prior to accruing the advanced leave then the remaining not yet accrued leave can be deducted from their final pay. Make sure that the agreement is acknowledged in writing.

How You Prepare:

Here’s why we’re posting this article now – Review annual leave balances now. Hopefully, for the majority of your team, there is, or will be, sufficient leave balances to cover your planned shutdown period.

Don’t forget to take into account any leave requests between now and the beginning of your shutdown period.

In the event that there is a shortfall, you need to consult with the employee to reach a mutual agreement such as under the terms described above. If a mutual agreement can’t be reached, the employee has the right to request to work the period. If this is not feasible, especially for Work Health & Safety reasons, the employer may be required to continue to pay the employee through the shutdown period even though no work is conducted. Obviously, you will want to avoid this, so early planning will minimise the risk of a shortfall.

If you have any questions or concerns, please don’t hesitate to reach out to us at [email protected] or call (02) 9119 2266 to speak to one of the team.