The Christmas/New Year period is traditionally a slow one in certain industries. Many employers shut down the whole or a part of their enterprises to avoid the costs of doing business during this low activity period.
This is particularly common in the current economic climate. Can employers require their employees to take paid annual leave or unpaid leave, to avoid the cost of paying employees for attending at work when productivity will be low?
For employees covered by modern awards or enterprise agreements made under the Fair Work Act 2009 (FW Act), employers should first check whether and, if so, how the applicable instrument permits them to direct employees to take leave for the period of the Christmas/New Year shut down.
For instance, under both the Mining Industry Award 2010 and the Building and Construction General On-site Award 2010:
Under the Building and Construction General On-site Award, an employer is required to provide at least two months notice of its intention to utilise the provisions of the award to ask all, or the majority, of its employees to take the whole of the annual leave due to them over the Christmas/New Year period. In contrast, no such notification is required under the Mining Industry Award.
In relation to employees who are not covered by a modern award or enterprise agreement, the FW Act provides that:
There is no express provision in the FW Act entitling an employer to direct an award/agreement-free employee to take unpaid leave. An employer may be contractually entitled to do so, depending on the specific terms of the employment contract entered into between the employer and employee. Past practice in the business concerning the taking of leave for the purpose of the Christmas/New Year shut down may also be relevant to determining whether an employer is contractually entitled to require an employee to take unpaid leave over this period.
Different considerations to those described above may arise for employees of employers who are not subject to the FW Act. Specific advice should be sought in relation to such employees.
The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.