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Christmas break dilemmas: an easy guide to solving them

The Christmas-New Year period and summer school holidays raise the same dilemmas each year for employers. Here's what you need to know to be prepared.
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Christmas break dilemmas: an easy guide to solving them

Christmas break dilemmas: an easy guide to solving them

29 November 2018

With less than a month till Christmas, some of the questions many employers have are:

  • whether to close down during the Christmas-New Year break
  • public holidays (such as which days are holidays over the period) and the effect they have on a period of paid annual leave, and payment for work on a holiday
  • requests by employees for annual leave, and
  • the right of an employer to direct an employee to work on a public holiday.

In this guide, we'll tackle some of these curly questions and provide you with what you need to know to ensure your business also complies with the Fair Work Act.

Taking annual leave – the close down

An employer may be unsure of the right to close down a business over the Christmas-New Year period and send employee on annual leave. This can also cause employees to become disgruntled when no prior warning is given by an employer of a close down.

While the Fair Work Act prescribes annual leave is to be taken for a period agreed to between an employer and an employee, it can be permissible for an employer to send employees, or a section of employees, on annual leave in certain circumstances.

Award/agreement-free employees

In the case of award/agreement-free employees, the Fair Work Act (s94(5)(ii)) provides that a requirement to take paid annual leave may be reasonable if, for example, an employer’s enterprise is being shut down for a period, for example between Christmas and New Year. The applicable modern award, enterprise agreement or contract of employment may contain terms that provide for an annual close down.

Award-covered employees

Most modern awards contain terms which allow an employer to send employees on annual leave under specific circumstances, such as a close down. Such terms, for example, are provided in clause 29.5 of the Clerks – Private Sector Award 2010, which states an employer may require an employee to take annual leave as part of a close down by giving four weeks’ notice.

As terms relating to annual close down may differ, such as the required period of notice, reference should be made to the applicable modern award to determine the conditions under which a close down may be taken.

Payment for annual close down

What if an employee has insufficient accrued leave at the time of the annual close down?
  • Award/agreement-free employees: may be granted annual leave in advance of accrual where the balance of accrued leave is less than the period of the close down, but they cannot be directed to take unpaid leave.
  • Award/agreement-covered employees: an employer cannot direct employees to take unpaid leave during an annual close down unless allowed by an applicable modern award or enterprise agreement.  For example, the Manufacturing and Associated Industries and Occupations Award 2010 provides that an employee with insufficient accrual of annual leave can be sent on unpaid leave for the duration of a close down. Most modern awards permit an employer to deduct from termination pay any shortfall in accrual of annual leave when compared with the period of annual leave granted in advance of entitlement.

Requests for annual leave 

An employer may receive an increased number of requests from staff for annual leave over the Christmas-New Year period. Under the Fair Work Act (s88(2)), an employer cannot unreasonably refuse to authorise an employee’s request to take annual leave.

With respect to the terms of a modern award or enterprise agreement (s93(3)), in assessing the reasonableness of a requirement or direction to take annual leave, it is envisaged that the following are all relevant considerations:
  • the needs of both an employee and an employer’s business
  • any agreed arrangement with an employee
  • the custom and practice in the business
  • the timing of the requirement or direction to take leave, and
  • the reasonableness of the period of notice given to an employee to take leave.

For example, refusing an employee’s request to take annual leave may be reasonable where an employee is required to perform plant maintenance or other essential duties while other employees are absent from work, or the employer’s business has closed operations because of business requirements.

Declared public holidays

The Fair Work Act (s115) is applied in conjunction with state and territory public holiday laws in determining which days are declared a public holiday, or part-day holiday, for the relevant state or territory.

The following are the declared public holidays, and part-day holidays, over the Christmas and New Year period 2018-19:

All states and territories
  • Tuesday 25 December 2018 – Christmas Day
  • Wednesday 26 December 2018 – Boxing Day (in South Australia, this is Proclamation Day)
  • Tuesday 1 January 2018 – New Year’s Day
  • Monday 28 January 2019 – Australia Day Holiday

South Australia – Christmas Eve and New Year’s Eve

The following dates will be a part-day public holiday for South Australia:
  • Christmas Eve – Monday 24 December 2018 – 7pm to midnight
  • New Year’s Eve – Monday 31 December 2018 – 7pm to midnight

Payment for work on a public holiday

Although a day may be declared a public holiday by the relevant state or territory public holidays statute, this does not mean an employee is entitled to payment of public holiday penalty rates for work performed on that day.

The public holiday provisions of the applicable modern award or enterprise agreement determine the entitlement to a penalty rate for work performed on a particular day. There is no statutory penalty rate for an award/agreement-free employee who works on a designated public holiday – any additional payment is determined by an individual contact of employment.

Public holidays and other leave

Under the Fair Work Act (s89), if the period during which an employee takes paid annual leave or paid personal/carer’s leave includes a day or part-day that is a public holiday in the place where the employee is based for work purposes, the employee is taken not to be on paid annual leave or personal/carer’s leave on that public holiday.

Rostered day off (RDO)

Some modern awards allow a system of hours whereby additional hours are worked so that an employee receives a day off with pay over the roster cycle. In most instances, this would mean a RDO every four weeks, although this will vary depending on the length of the period of the roster cycle.

Generally, a modern award provides that where a full-time employee’s ordinary hours include a RDO and such day falls on a public holiday, an employee is entitled to either: 7.6 hours pay at the ordinary rate; 7.6 hours of extra annual leave; or a substitute day off on an alternative week day.

Reference should be made to the relevant modern award to determine an employee’s entitlement with respect to RDOs.

Continuous shift work

A modern award may provide that a seven-day continuous shift worker whose ordinary working time includes public holidays, but who  is rostered off duty on a public holiday and who does not work, shall have a day added to his/her annual leave or be paid an additional day’s pay to the weekly wage.

Refusal to work on a public holiday

The Fair Work Act (s114) states that an employer may request an employee to work on a public holiday if the request is reasonable. Likewise, an employee can refuse to work on a public holiday if the employer’s request is not reasonable.

In determining whether an employer’s request is reasonable, the following must be taken into account:
  • the nature of an employer’s workplace and the nature of an employee’s work
  • an employee’s personal circumstances
  • whether an employee could reasonably expect an employer might request work on the public holiday
  • whether an employee is entitled to receive overtime or other penalty payments that reflects the expectation to work public holidays
  • the type of employment of an employee, e.g. whether full-time, part-time, casual or shift work
  • the amount of notice in advance of the public holiday given by an employer to an employee, and
  • the amount of notice given by an employee when refusing a request to work on a public holiday.

A worker who fails to attend for work when rostered on a public holiday is still entitled to payment for the holiday, but may be the subject of disciplinary action if he/she fails to provide a reasonable excuse for the absence. Also, an employee who is absent the day before or after a public holiday without reasonable excuse does not forfeit payment for the public holiday, but would not receive payment for the day absent from work.

About Workplace Assured

Workplace Assured is a proactive employment relations solution for small to medium businesses designed to provide complete peace of mind when it comes to managing and complying with employment relations obligations.

Our services include proactive legal compliance review, 24/7 access to employment relations advice, documentation and awards servicing, employment practices liability insurance and legal representation in the event of a claim.

Need help in managing the Christmas-New Year leave period? Contact our free advice line for employers on 1300 495 955 if you have any questions.

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