Annual Shut Down

No matter how much you deny it, Christmas and New Year are coming.  So, are you gonna open or close your business over this time?

Many businesses find that due to a general slowdown in business during the Christmas to New Year’s period that on balance, it’s a good time to shut the doors for a week or two.  This is quite legal, but ensuring that you then actually do the right thing legally by your employees is another matter.

The Fair Work Act (Cth) 2009 doesn’t actually give any direction with regard to annual shut downs.  It gets duck shoved to the Modern Awards to be able to make reasonable terms about directing employees to take annual leave.  Luckily, most do.  Unfortunately, these vary quite a bit.  Some will say you can only do an annual shut down over the Christmas and New Year’s period.  Others will allow an annual shut down for seasonal or other reasons.  Some Modern Awards will specify one month’s notice, others require two months notice. So do check your Modern Award, or Awards, to see what guidelines you must follow.

It’s usually a good idea for a company to have a policy around annual shut downs, as there may be other variables for your business.  Will you shut down manufacturing and just keep a skeleton administrative and logistics crew?  At what point will you decide the span of time to be taken off?  When and how will affected employees expect to be told?  Discussing annual shut downs during the interview process and including it as a contractual term can be useful too, as some potential employees can object to being told when to go on holidays.

Also to think about, what if an employee doesn’t have enough paid annual leave to cover the shut down?  The company may want to give annual leave in advance (by agreement with both parties) or it just becomes leave without pay.

To take away?  If you haven’t already notified your employees of an impending annual shut down, you’d better do so soon.  Talk to me if you want some help deciding what’s best for your employees and business.