Shutdown Season: How to Keep Holiday Cheer—and Compliance—Intact!
As the end of the year approaches (yikes!), many businesses consider a temporary closure, or “shutdown,” to give employees a well-earned break and reduce operating costs. While a holiday shutdown can be beneficial for both employers and employees, it’s essential for employers to understand their obligations to avoid compliance issues.
Here’s what you need to know to navigate the holiday season successfully and ensure your shutdown period is compliant with employment laws:
1. Know Your Industrial Instrument
The rules around shutdowns vary depending on the industrial instrument that applies to your employees, such as an award, enterprise agreement, or employment contract. These instruments outline specific requirements and entitlements, and it’s crucial to review them before making any shutdown decisions.
Awards: Many modern awards contain clauses about shutdowns, especially in industries where shutdowns are common, like manufacturing and retail.
Enterprise Agreements: These often have tailored provisions regarding leave and shutdowns specific to your organisation.
Employment Contracts: Check any contract terms that may address annual leave or shutdowns.
Each industrial instrument has unique rules, and misinterpreting them can lead to complications, so it’s worth taking the time to understand your obligations.
2. Understand Your Options for Managing Leave
During a shutdown period, there are several ways to manage employee leave entitlements. Your options depend on what’s permitted under the relevant industrial instrument, and typically include:
Requiring Employees to Use Annual Leave: Many awards and agreements allow you to require employees to take annual leave during a shutdown, but often only with a certain amount of notice.
Providing Unpaid Leave: If employees don’t have enough annual leave saved up, unpaid leave may be an option. However, this approach can have limitations and may need employee consent.
Granting Leave in Advance: You might choose to allow employees to take annual leave in advance if they don’t have enough accrued leave. Be cautious, though, as this approach carries a financial risk for your business if the employee leaves before “repaying” the advance.
3. Give Sufficient Notice
Most awards and agreements require employers to give notice to employees about a shutdown period. The required notice period can vary, but it’s often around four weeks. The goal is to ensure employees have adequate time to plan for the break and address any concerns about leave entitlements.
Keep in mind that any notice must be provided in writing, specifying the dates of the shutdown and how the leave will be managed.
4. Communicate Clearly and Consistently
Clear communication with employees is key to a smooth shutdown period. Inform employees well in advance of the shutdown dates, the leave arrangements, and what they can expect. This transparency can prevent misunderstandings and support a positive working relationship moving forward.
5. Seek Professional Advice if Needed
Navigating holiday shutdown obligations can be complex. If you’re unsure about your obligations or how to interpret the industrial instrument covering your employees, seeking expert advice can save time and prevent potential compliance issues. Vantage Partners is available to help you review your industrial instruments and provide tailored advice to ensure a smooth, compliant holiday season for both you and your team.
The holiday season is a time for rest and rejuvenation—both for your business and your employees. By understanding your obligations and planning ahead, you can create a positive, compliant experience that keeps the holiday spirit intact for everyone.
If you need support with your shutdown planning, Vantage Partners is here to help!