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Recent Award changes regarding holiday shutdowns

In Australia, holiday shutdowns from Christmas into the first week or two of the new year are commonplace. However, this year’s process will need to address new obligations that took effect from 1 May 2023 for employees employed under a modern award.

This follows rulings made by the Fair Work Commission (FWC) in August and December 2022 regarding annual leave shutdown provisions.

The changes impact employers and employees covered by 78 modern awards, where the employer intends to shut down all or part of its operation for a particular period and wants affected employees to take paid annual leave during that period.

It has generally been accepted that the employer has to direct employees to take annual leave in this circumstance.  

However, the new Award changes require the employer to give the affected employees 28 days’ written notice of the shutdown period. A shorter notice period may be agreed between the employer and the majority of relevant employees.

The written notice must be given to new starters joining after the notice as soon as reasonably practicable after being engaged. 

Employers complying with these requirements may direct employees to take paid annual leave during the shutdown. Again, this direction must be in writing and must be reasonable. There is no guidance as to when such a notice is unreasonable. It will be rare that such a requirement would be unreasonable if the proper notice of the shutdown is given.

However, the FWC considered it did not have the power to include an Award provision that allowed employers to direct employees to take unpaid leave during a shutdown period. This presents issues for employers where employees have insufficient leave accruals due to leave already taken or they have insufficient service.

Employers who are concerned with a situation where it cannot direct employees to take unpaid leave have the following options:

negotiate appropriate provisions in employment contracts or enterprise agreements to give themselves that right

give employees the option to take unpaid leave (any agreement to do so must be recorded in writing, e.g. by exchange of emails or text message)

make it clear to employees that annual leave requests will be refused if it results in insufficient leave being available during the regular shut down period

use RDOs or time off in lieu of overtime to ensure employees are paid during the shut down

granting employees with insufficient leave accruals paid annual leave in advance (again, these arrangements will need to be in writing and comply with relevant Award provisions). 

With the festive season fast approaching, it is crucial for employers to understand their obligations around annual leave and unpaid leave during shutdown periods. Employees should also be informed about their entitlements regarding leave during workplace shutdowns.

Overall, the best course of action is working together and ensuring good lines of communication. 

Navigating these changes can be challenging for many employers. Employers are advised to seek legal guidance to review existing employment contracts, leave policies, or procedures. 

Reviewing your holiday shutdown process will help your business ensure compliance with the new requirements.

Below is a list of awards that are impacted:

Aboriginal and Torres Strait Islander Health Workers and Practitioners and Aboriginal Community Controlled Health Services Award

Aircraft Cabin Crew Award

Airline Operations–Ground Staff Award

Alpine Resorts Award

Aluminium Industry Award

Ambulance and Patient Transport Industry Award

Animal Care and Veterinary Services Award

Aquaculture Industry Award

Asphalt Industry Award

Banking, Finance and Insurance Award

Broadcasting and Recorded Entertainment Award

Building and Construction General On-site Award

Business Equipment Award

Car Parking Award

Cemetery Industry Award

Cement, Lime and Quarrying Award

Cleaning Services Award

Clerks—Private Sector Award

Coal Export Terminals Award

Commercial Sales Award

Concrete Products Award

Contract Call Centres Award

Educational Services (Post-Secondary Education) Award

Electrical Power Industry Award

Electrical, Electronic and Communications Contracting Award

Fitness Industry Award

Food, Beverage and Tobacco Manufacturing Award

Gardening and Landscaping Services Award

Gas Industry Award

General Retail Industry Award

Graphic Arts, Printing and Publishing Award

Hair and Beauty Industry Award

Health Professionals and Support Services Award

Higher Education Industry—General Staff—Award

Horse and Greyhound Training Award

Hospitality Industry (General) Award

Hydrocarbons Industry (Upstream) Award

Joinery and Building Trades Award

Journalists Published Media Award

Legal Services Award

Local Government Industry Award

Manufacturing and Associated Industries and Occupations Award

Meat Industry Award

Mining Industry Award

Mobile Crane Hiring Award

Miscellaneous Award

Nursery Award

Nurses Award

Oil Refining and Manufacturing Award

Pest Control Industry Award

Pharmaceutical Industry Award

Plumbing and Fire Sprinklers Award

Poultry Processing Award

Premixed Concrete Award

Professional Employees Award

Racing Clubs Events Award

Racing Industry Ground Maintenance Award

Real Estate Industry Award

Registered and Licensed Clubs Award

Restaurant Industry Award

Road Transport (Long Distance Operations) Award

Road Transport and Distribution Award

Salt Industry Award

Seafood Processing Award

Security Services Industry Award

Silviculture Award

Storage Services and Wholesale Award

Sugar Industry Award

Supported Employment Services Award

Surveying Award

Telecommunications Services Award

Textile, Clothing, Footwear and Associated Industries Award

Timber Industry Award

Vehicle Repair, Services and Retail Award

Water Industry Award

Wine Industry Award

Wool Storage, Sampling and Testing Award.

Charles Power, Workplace Relations & Safety Partner at Holding Redlich

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