In the coming months, a new term dealing with annual leave during a planned ‘shutdown’ period will start to take effect in many modern awards which currently contain a term, or terms, dealing with leave arrangements and related matters during shutdown periods. Impacted awards include the:
- Clerks — Private Sector Award 2020 (clause 32.5);
- Educational Services (Post-Secondary Education) Award 2020 (clause 22.5);
- Higher Education Industry—General Staff—Award 2020 (clause 24.4); and
- Professional Employees Award 2020 (clause 18.4).
Some awards are impacted from 1 May 2023.
The change is part of the Fair Work Commission’s four yearly modern award review and a desire to standardise the requirements and obligations for annual leave during shutdown periods.
Many employers have planned shutdown periods including for an annual close down during the Christmas holiday season. This type of shutdown is different to a stand-down of employees required because of a third-party cause (such as a breakdown of machinery, natural disaster or industrial action in certain circumstances). While sometimes the terminology is used interchangeably, they are different concepts under the legislation. The award change which is the subject of this article relates to planned shutdowns of a whole or part of an employer’s operation.
Currently, many awards deal with how an employer can require an employee to take leave, whether paid or unpaid, during the ‘shutdown’ period. Some awards are more prescriptive than others.
The upcoming change will see the inclusion of a new ‘model term’ in each of the 78 impacted awards. The key feature of the change is that an employer will not be able to require or direct an employee to take unpaid leave during the shut down period. That does not mean that the employer has to pay the employee where the employee has exhausted their paid annual leave entitlements but the employer may need to work with the employee on a specific mix of leave to cover the period, such as use of any remaining paid annual leave entitlement, agreed leave in advance or leave without pay with agreement of the employee.
Other features of the change include:
- That an employer must give employees at least 28 days written notice (or longer if stipulated) of a temporary shutdown period (there is a limited exception to this notice requirement);
- Any direction to take paid annual leave must be ‘reasonable’.
Planning for impact
If your organisation’s workforce, or part of your workforce, is covered by an award, it is recommended that your organisation:
- check if the current award contains any terms regarding annual leave during shutdown periods;
- seek advice about whether the change described above will impact on the applicable award; and
- review your policies and processes for upcoming shutdown periods including how other annual leave requests during the year may impact on the employee’s annual leave balance when it comes to the planned shutdown period.
How we can help
Moores can help you to identify the necessary steps to ensure that your organisation is compliant with the new changes, including updating of leave policies, to ensure compliance. Get in touch with the Workplace Relations team at Moores if you or your organisation need any assistance with these matters.
Contact us
Please contact us for more detailed and tailored help.
Subscribe to our email updates and receive our articles directly in your inbox.