New Laws for Employers on Shutdowns: From 1st May 2023

The Australian workplace changed from 1 May 2023 with little fanfare or notice to small businesses. Many awards governing annual leave during temporary business shutdowns are now changed.

A “shutdown” refers to the temporary closure of a business, such as during the Christmas and New Year period.

The updated rules, effective from 1 May 2023, have important implications for employers and employees alike. Here are the key changes:

• Employers may require employees to take paid annual leave during a temporary shutdown.
• Employers must provide all affected employees at least 28 days’ written notice of the temporary shutdown period. However, the notice period can be reduced through an agreement between the employer and the majority of impacted employees.
• The requirement for employees to take annual leave must be reasonable.
• Suppose an employee has insufficient paid annual leave to cover the entire shutdown period. In that case, the employee can agree with their employer for other options for the days not covered. These options ought to be agreed in writing and may include:
  1. using accrued time off, such as time off in lieu
  2. annual leave in advance
  3. leave without pay
• During the shutdown period, the employee will not be paid for any public holidays that fall on days they would normally work. Employees will continue accumulating annual leave during a shutdown period unless they take leave without pay.
• It is important to note that the new rules apply only to businesses governed by those awards that have been updated with these changes. It is therefore crucial for employers to check what award or awards that apply to their business is affected by the updated rules.

Employer Must Do’s

1. Notice to employees of the shutdown period and of their entitlement in relation to taking annual leave is critical.
2. Employers must also ensure that any agreement reached with employees regarding alternative options for days not covered by paid annual leave is recorded in writing.

Long Saad Woodbridge’s workplace relations team can provide further guidance on this topic.

Important Disclaimer: The content of this article is general in nature and for reference purposes only.  It does not constitute legal advice and should not be relied upon as such.  Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.