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Preparing for Shutdown Periods: Essential Updates in Employment Law

November 23, 2023   Junzhuo ShiPhilip Evangelou

As we approach the end of the year, it’s crucial for businesses to be aware of the recent employment law updates, particularly those affecting shutdown periods. On 22 December 2022, the Full Bench of the Fair Work Commission made a determination to significantly vary and standardise the shutdown clauses in 78 modern awards. With these changes having taken effect from 1 May 2023, it’s important to understand how they might impact your business operations.

These changes are especially important to know as we approach the temporary shutdown period that almost all businesses will be having – the Christmas and New Year period – although other temporary closures for renovations and maintenance also apply.

New Requirements for Unpaid Leave

The key updates revolve around how businesses manage employee leave during shutdowns. Before, employers could direct employees to take unpaid leave during shutdown periods if they had not accrued enough annual leave. Under the new regulations, you can no longer direct your employees to take unpaid leave during shutdowns without a prior written agreement. This means that employers will need to negotiate alternative arrangements that may involve having employees use their accrued time off or taking annual leave in advance. Employees can still take unpaid leave, but this must be negotiated and recorded in a written agreement.

New Requirements for Annual Leave

Additionally, even if an employee has sufficient annual leave, directing them to use it during the shutdown period must be “reasonable” and requires a proper written notice given at least 28 days before the shutdown. You may reduce that notice period by agreement with your employees.

Steps You Can Take

To ensure your business complies with these changes, consider the following actions:

  • Determine whether you or your employees fall under one of the affected Modern Awards;
  • Update your employment contracts to accommodate arrangements for unpaid leave, notice periods and other options related to temporary shutdown periods;
  • Be mindful of the required notice period for directing employees to take annual leave; and
  • Update your employees on the new approach and the options they have for upcoming shutdown periods.

Adapting to these new legal requirements may pose challenges for many businesses. To navigate these changes smoothly and to avoid potential legal pitfalls, seeking legal advice is essential. Our team is equipped to provide comprehensive guidance and support to ensure your business remains compliant with these updates. Whether it’s understanding the nuances of the new laws, revising your employment agreements or strategising for the upcoming shutdown periods, our legal experts are here to assist.

For more information or to schedule a consultation, please do not hesitate to contact us via the form on this page or on 1300 337 997.

About Junzhuo Shi

Avatar photoJunzhuo, an intern at OpenLegal, is a law graduate from UNSW and a newly admitted lawyer in NSW with extensive experience in global firms' PRC and Hong Kong offices. Her background provides her with practical knowledge in corporate compliance, finance, and contract law.

About Philip Evangelou

phillipPhil is a director at OpenLegal. He has over 16 years experience working in private practice and in-house counsel in Sydney and London, giving him expertise in employment law, IP, finance, leases, dispute resolution, insurance and contracts.