Q. I understand that if it is the employer’s intention to direct staff to participate in an annual shutdown over the Christmas-New Year period, the amount of notice given to employees must be reasonable. Is there a more specific notice requirement than the 'test of reasonableness'? 

A. The source of entitlement for an employer that wishes to direct employees to participate in an annual close-down is the applicable modern award or enterprise agreement or, if an employee is award/agreement free, the Fair Work Act. 

The majority of modern awards which prescribe annual close down for annual leave purposes provide that the employer must give affected employees one month’s notice of the intention to close down. 

It should be noted that a close down for annual leave does not necessarily involve the whole of the employer’s enterprise – it may only apply to a section or sections. For example, it is common in the manufacturing industry for the production area to close down at Christmas while the maintenance section performs routine work on production machinery. 

Check the applicable modern award 

Provision for annual close down for annual leave purposes is not a ‘standard’ term in modern awards. Therefore, the employer should check the applicable modern award to determine the specific requirements for close down. While the majority of modern awards prescribe one month’s notice of the employer’s intention to close down for annual leave, this is not applicable in every case. For example, the Textile, Clothing, Footwear and Associated Industries Award 2020 requires the employer to give three months’ notice of the intention to close down for annual leave. While some awards like the Horticulture Award 2020 do not actually allow employers to direct employees to take annual leave during a shutdown, so employers must seek their employees’ voluntary agreement to do so.

Reference should be made to the applicable modern award or enterprise agreement to determine the amount of notice to be given by the employer to the affected employees. 

Award/agreement free employees 

In the case of an award/agreement-free employee, the Fair Work Act (s94) states that an employer may require an award/agreement-free employee to take a period of paid annual leave, but only if the requirement is reasonable. The one month provision – as in many awards – provides general guidance in relation to annual close-down, although the employer should notify affected employees as soon as possible after the decision to close down has been made. 

Bottom line 

Generally a modern award requires the employer to give at least one month’s notice to send employee’s on an annual close down. It is advisable to provide as much notice as possible to allow employees to make the necessary arrangements for holidays.