The short answer is, ‘it depends.’

Of course, if your employees are working over this time, they need to be paid for the work that they do, as per usual. However, if your business shuts down over the Christmas and New Year break, the requirements for paid vs unpaid leave vary depending on the circumstances.

We’ve previously covered information regarding the notice required to be provided to employees for this annual shut down, which you can read here.

Assuming you have already established the time your business will be shut down and notified the relevant staff of these changes, the next step is understanding the entitlements regarding paying your staff during this period.

Modern Awards

Under Modern Awards, employers can generally require employees to take paid annual leave during this time. However, if the employee does not have enough leave accrued, many awards DO NOT give employers the power to require employees to take unpaid leave.

In this scenario, if the employee doesn’t have enough leave accrued, the employer and the employee need to come to an agreement to either, take unpaid leave, take paid leave in advance of it accruing or simply paying the employee.

An example of a Modern Award providing the opportunity to require an employee to take unpaid annual leave is the Building and Construction General On-Site Award 2010:

38.3 Annual close down

(a) An employer may direct an employee to take paid annual leave during all or part of a period in conjunction with the Christmas/New Year holidays,where the employer shuts down the business,part of the business,or a site where the employee works. If an employee does not have sufficient accrued annual leave for the period of the shutdown,then the employee may be required to take leave without pay for the balance of the shutdown period for which leave is not accrued.

In comparison, the Clerks – Private Sector Award 2010 simply states:

29.5 Close-down

An employer may require an employee to take annual leave as part of a close-down of its operations,by giving at least four weeks’notice.

This award does not provide the ability for the employer to require an employee to take leave without pay during this time.


Enterprise Agreements

As each enterprise agreement has its own terms and conditions, you’ll need to refer to the agreement to check whether it has a clause that sets out the obligations around annual leave shutdown leave payments.


Award Free Employees

Award free employees can not be required to take unpaid leave, should they not have enough leave accrued. It is possible for the employer and the employee to come to an agreement about either taking unpaid leave, or leave in advance, but if there is no agreement in place (in writing) then the employee will need to be paid as per usual.


Casual Employees

Generally speaking, casual employees will simply not be rostered on over the days the workplace is closed, and so, therefore, aren’t entitled to be paid for that time. Casual employment conditions are quite complex though, so it’s best to check the entitlements of each employee before making a decision about this entitlement.


Still not clear on the leave entitlements for your employees over the Christmas shut down? Give us a call on 1300 766 380.


* This is general information only and doesn’t take your specific business circumstances into account.