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New shutdown rules for employers

Planning to close down over Christmas this year? New shutdown rules for employers have now kicked in.  

From 1 May 2023, many awards will have updated rules on taking annual leave during a shutdown.

A shutdown is when a business chooses to temporarily close down all or part of a business for a particular period, such as Christmas and New Year. A shutdown is also known as a close down.

During a shutdown, employees can be directed to take annual leave if:

  • their award or agreement allows it, or
  • they aren’t covered by an award or agreement.

The new rules mean:

  • employers may require employees to take paid annual leave during a temporary shutdown
  • employers must provide at least 28 days’ written notice of the temporary shutdown period to all impacted employees
  • the requirement to take annual leave must be reasonable
  • the notice period can be reduced through an agreement between the employer and the majority of impacted employees
  • an employee who doesn’t have enough paid annual leave to cover the whole period can form an agreement with their employer for other options for the days not covered, such as: 

     i) using accrued time off

     ii) annual leave in advance, or

     iii) leave without pay.

The employee will be paid for any public holidays during the shutdown period that fall on days they would normally work.

Information on shutdowns as they apply to your particular industry is available from the Fair Work Ombudsman’s Direction to take annual leave during a shutdown page.

First you’ve heard of the new shutdown rules? Not surprising; you’re busy running your business, right? There’s plenty of things in the Fair Work Act you probably don’t know but unfortunately, not knowing isn’t going to be a valid excuse when one of your employees (or more likely, a disgruntled ex-employee) reports you to the Fair Work Ombudsman. And the penalties for a breach of the Fair Work Act can be significant. One solution? Partner with someone who does know. Someone with genuine experience as a HR Manager to give you right advice. Our suggestion? Click here and all will be revealed. 

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