New Fair Work Ombudsman guidance to help employers avoid potential holiday-related breaches
The Fair Work Ombudsman (FWO) has issued fresh guidance on the rules and entitlements ahead of the end-of-year holiday season, as it reminded employers and employees to start planning for closures.
The FWO said there are different rules that apply when a business shuts down or reduces staff numbers during the end-of-year season, with the rules depending on what covers an employee.
Employers can direct their employees to take annual leave during a shutdown if their award or enterprise agreement allows it.
Employees without enough annual leave to cover a shutdown can use annual leave before they've accrued it or take unpaid leave, depending on the award and the agreement between the employer and employee.
According to the FWO, some awards allow employers and a majority of employees to agree on a shorter notice period for a shutdown, while others can include rules about when a business can close.
"Many awards have clauses about annual leave during shutdowns. Each award and agreement is different, so employers should check theirs before they give employees any directions to use annual leave," the FWO said.
No shutdown rules, no awards
For employees with awards or agreements that do not cover the shutdown, the FWO said these employees can make an agreement with their employer to take annual leave.
"If no award or agreement applies, employers can only direct the employee to take annual leave if the direction is reasonable," the FWO added.
Employees who aren't working during the shutdown should also engage with their employer regarding their right to disconnect.
"Before shutting down for the end-of-year period, employers and employees should discuss if the employee will be required to be contactable or remain on call," the FWO said.
Working during a shutdown
For employees who are working during a shutdown, the FWO reminded employers that these workers should receive their normal pay.
"If there is a public holiday during the shutdown, employees should still be given the day off without loss of pay, or they should be paid the public holiday rates under their award or agreement if they work," it said.
Employers can ask their staff to work overtime or on public holidays during the shutdown if the request is reasonable. Among the considerations that employers should make are:
- the needs of the business
- the role and responsibility of the employee
- the employee's personal commitments, like family or caring arrangements
- how much notice the employee gets about the extra hours
- what the employee's contract says.
The FWO also reminded employers that employees working overtime or on a public holiday during the shutdown can receive additional entitlements depending on the award. These entitlements may include:
- penalty rates
- a different day off
- extra annual leave
"Employers should check if they need to manually adjust their payroll system to ensure other paid leave (like annual leave) isn't incorrectly deducted during a public holiday," the FWO said.
"The minimum pay rate doesn't include any loadings, overtime or penalty rates that they usually get for working that day. An employee's roster can't be changed to deliberately avoid this payment."
The FWO will be holding a webinar on employers' obligations for the end-of-year season on 14 October.
