Annual close down of businesses

What should I know if I want to ‘close down’ my business for brief period?

Businesses that close down over the Christmas period and require team members to take their annual leave over this time must comply with potentially complex rules if they are to avoid contravening the Fair Work Act 2009 (Cth), a modern award or an enterprise agreement.

As business owners and managers, it is critical you are aware of:

the awards or enterprise agreements covering your team members, if any;
how these awards or agreements deal with close down and annual leave, if anything; and
the requirements of the Fair Work Act when it comes to directing team members to take their annual leave.

If your team members are covered by a modern award or enterprise agreement, it is likely that it will contain provisions concerning annual close down and directing team members to take annual leave. Most modern awards contain close down provisions.

How do I handle a close down if my team members do not have sufficient accrued annual leave?

Modern awards and enterprise agreements usually include rules to cover the situation where a team member does not have enough accrued annual leave to cover the close down period. These usually provide that team members may be required to take unpaid leave for part of the shutdown period, or to take paid annual leave in advance of accruing it.

Where an award or agreement does not deal with annual close down or if you have not included this in an employment contract, you can attempt to reach agreement with individual team members that they take unpaid leave or annual leave in advance.