As we enter the festive season, the Christmas and New Year period brings unique challenges for businesses across Australia. While some industries may need to scale up to meet holiday demand, many others will wind down for an annual shutdown. To ensure operations run smoothly and compliance is maintained, it’s essential to plan for employee entitlements, manage payroll, and meet any holiday-related requirements. Here’s a comprehensive guide to help you navigate the shutdown season.
Understand the Concept of a Shutdown
According to the Fair Work Ombudsman, a holiday shutdown is a temporary closure during a period when it’s less practical to operate—often due to reduced demand or limited staff availability. It’s different from a “stand down,” which occurs when work halts for reasons outside of the employer’s control. Knowing this distinction is crucial for applying the right leave policies.
Review Relevant Awards and Agreements
Each Award and Agreement may have specific provisions governing shutdown periods, especially during Christmas and New Year. Use the Fair Work Ombudsman’s “Find My Award” tool to confirm the details for your employees, and if your team is covered by a registered agreement, review the terms for holiday breaks. These can vary by industry and region, so it’s essential to verify the exact conditions that apply to your workforce.
Managing Shutdown Payments
Employee entitlements during a shutdown can vary based on employment type:
Full-time and Part-time Employees: Typically, these employees are paid for the shutdown period, with the time counted as annual leave.
Casual Employees: Casuals are generally unpaid during the shutdown as they are not usually rostered to work.
In some cases, Awards or Agreements may allow you to request employees to use their leave during a shutdown. However, if no such provision exists, you cannot mandate it. If an employee has insufficient leave, some agreements may allow options like unpaid leave or leave in advance, but any arrangements should be mutually agreed upon.
Tip: If you’re uncertain about the leave options in a specific Award or Agreement, our team is here to help clarify your responsibilities.
Annual Leave Loading
Annual leave loading is an additional pay percentage (often 17.5%) that applies to annual leave for employees covered by specific Awards and Agreements. This loading helps employees maintain earnings while on leave, but not all awards require it. Make sure to check the relevant Award or Agreement for your employees to determine if annual leave loading applies during the shutdown.
Housekeeping Essentials for a Smooth Shutdown
Planning ahead is key to navigating the administrative demands of the holiday season. Here are some essential steps:
Notify Employees Early: Give employees at least four weeks’ written notice of the shutdown period. For new hires, ensure they receive notice as soon as possible.
Collect Relevant Documentation: Request that employees submit leave forms detailing their leave dates and plans.
Calculate Leave Entitlements: Confirm each employee’s leave balance and record any anticipated absences.
Account for Public Holidays: Remember that public holidays like Christmas Day, Boxing Day, and New Year’s Day are counted separately and can impact entitlements.
Manage Working Employees: Identify any staff who may work during the shutdown, and consider penalty or adjusted pay rates as needed.
Plan Payroll Cycles: Decide in advance whether leave payments will follow the regular payroll cycle, be paid before Christmas, or coincide with the shutdown.
Prepare Pay Runs in Advance: Shutdowns can place extra demands on payroll, so it’s wise to process pay runs early, covering standard adjustments for January if possible.
Tip: If we manage your payroll, we’ll take care of most of these steps for you, with consultation to ensure everything runs smoothly.
Public Holidays - Christmas and New Year Overview
The Christmas Day, Boxing Day, and New Year’s Day holidays are standard public holidays nationwide. However, some states observe additional part-day public holidays on Christmas Eve and New Year’s Eve.
Here’s a quick reference for each state:
State | Christmas Eve (Dec 24) | Christmas Day (Dec 25) | Boxing Day (Dec 26) | New Year's Eve (Dec 31) | New Year's Day (Jan 1) |
|---|---|---|---|---|---|
NSW, VIC, ACT, WA, TAS | No | Yes | Yes | No | Yes |
QLD | 6pm – 12am | Yes | Yes | No | Yes |
SA | 7pm – 12am | Yes | Yes | 7pm – 12am | Yes |
NT | 7pm – 12am | Yes | Yes | No | Yes |
Public Holiday Entitlements
If employees are scheduled to work on a public holiday, it’s crucial to pay the appropriate penalty rates as outlined in their Award or Agreement. Remember that some Awards may also have extra requirements, such as minimum engagement periods for holiday shifts. For employees who normally work on a day that falls on a public holiday, but are not required to work, they may be entitled to payment for their standard hours.
If you’re unsure about your obligations, especially regarding penalty rates and public holiday pay, our team can help clarify the requirements.
Need Advice?
The Christmas shutdown period can feel challenging, especially when managing varied entitlements and compliance requirements. If you have questions about planning, notifications, leave entitlements, or specific requirements for your industry, don’t hesitate to reach out. We’re here to ensure you have a smooth and compliant shutdown, leaving your team ready for the New Year.
For additional support, please contact us. Your Account Manager is ready to assist with your HR and compliance needs this holiday season.
Disclaimer: This article is intended to provide general guidance and is not specific advice. We encourage you to seek tailored advice for your circumstances.
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