Christmas and New Year leave and shutdowns: what are the rules this season?

holiday shutdown

As an HR Consultant, I get a lot of curly questions from small businesses on their employer obligations around leave requests, entitlements and bonuses. And many employers are wondering what the rules are around shutdowns. This article will dive into some frequently asked questions when it comes to Christmas and New Year leave.

Can you legally force staff to take leave during a compulsory company shutdown?

According to Fair Work, a shutdown is when a business temporarily closes during slow periods of the year, such as Christmas and New Year. There may be specific rules depending on the award on whether an employee can be directed to take paid and unpaid annual leave during a shutdown.

For example, the Building and Construction Award state, “Employees can be directed to take annual leave during a shutdown period. They have to be given at least two months notice before the leave needs to be taken if the purpose of the shutdown is to give all employees (or the majority of them) all of their accumulated annual leave.”

Note: a shutdown is not the same as a stand-down: a stand-down is when an employer sends employees home if there is no useful work for them to do.

If your business is covered by a registered agreement, please check the terms of the agreement for information about when an employee can be directed to take annual leave during a shutdown.

How can businesses deal with holiday requests fairly?

Under the Fair Work Act, an employer cannot unreasonably refuse to authorise an employee’s request. To assess the reasonableness, there are some factors such as:

  • balancing the needs of both the employee and the business requirements
  • any prior agreed arrangement with an employee
  • the timing of the request or direction to take leave and whether it was a reasonable notice period.

Refusing an employee’s request to take leave may be reasonable if, for example, they are required to perform equipment maintenance and essential duties while other employees are absent from work.

How is work on a public holiday paid?

An employee is not always entitled to payment of public holiday penalty rates for work performed. This depends on the public holiday provisions in modern award or enterprise agreement. There is no sanctioned penalty rate for an award/agreement-free employee who works on a public holiday. The payment is determined by their contract of employment.

Can an employee refuse to work on a public holiday?

An employee can refuse to work on a public holiday if the employer’s request is not reasonable. Some of the things to consider are:

  •  the nature of the workplace and the nature of an employee’s work
  • an employee’s personal circumstances
  • the type of employment, e.g. full-time, part-time, or casual
  • the amount of notice given by an employer, and likewise, the notice given by the employee when refusing the request to work on a public holiday.

If an employee fails to attend work when rostered on a public holiday, they are still entitled to payment for the public holiday but could face disciplinary action if they don’t provide a reasonable explanation for the absence.

Should employees get a Christmas bonus?

First of all, employers need to look if there is a contractual right to receive a Christmas bonus. If there isn’t, there should be no obligation to pay a bonus. In many workplaces, bonuses are a great way to motivate employees to do a great job and recognise them for their work. However, bonuses are usually discretionary.

We’re all keen for a break and a fresh start for 2022, so if you want to end the year well, make sure you are across all your workplace obligations. If you have any questions about Christmas and New Year leave and entitlements specific to your award or agreement, it’s best to speak to an HR or employment lawyer.