Navigating Christmas Shutdowns: A Guide to the Modern Award Changes

It is important to note that the changes were implemented in the first half of 2023, but most businesses will only "shut down" or "close down" in December; this is the first time they will know the impact of the changes.

This article explores the key points and updates you need to know to ensure smooth payroll processing and compliance during the Christmas shutdown.

Understanding the Modern Award Changes

Modern Awards form the foundation of employee entitlements in Australia. To effectively navigate the Christmas shutdown, it's essential to familiarise yourself with any recent amendments. The Fair Work Commission has implemented changes in response to the evolving work landscape. These updates may impact your payroll calculations and employee entitlements.

A revised "model clause" has been inserted into most Modern Awards, prohibiting employers from directing employees to take unpaid time off during a temporary shutdown (e.g., Christmas and New Year). An employer must pay an award-covered employee during the temporary shutdown period if they do not require the employee to work during the shutdown period. 

Employers must also provide written notice of the closure to all award-covered employees. The most common notice time is 28 days or one month; however, some awards stipulate longer notice times of two or three months.

Below is a list of some common awards and their associated written notice requirements: 

Banking, Finance & Insurance Award 2020	28 days
Building & Construction General On-site Award 2020	Two months
General Retail Industry Award 2020	28 days
Miscellaneous Award 2020	One month
Meat Industry Award 2020	Three months
Clerks Private Sector Award	28 days
Social, Community, Home Care and Disability Services Industry Award 2010	Silent
Manufacturing and Associated Industries and Occupations Award 2020	28 days
Professional Employees Award 2020	28 days
Aboriginal and Torres Strait Islander Health Workers and Practitioners and Aboriginal Community Controlled Health Services Award 2020	28 days

 

Preparation and policies for annual leave and seasonal shutdowns

Every business should have policies in place for annual leave and shutdowns or close-downs to manage employee expectations and ensure compliance.

Here are some tips to prepare.

1. Check employee leave balances.

To understand and determine which employees will and will not have sufficient leave to cover the shutdown period, businesses should monitor employee annual leave balances throughout the year.

2. Implement, review or amend annual leave workplace policies.

It is a wise idea to have annual leave policies in place that cover the following:

• Employees taking annual leave throughout the year and outlining the requirement to take annual leave at shutdown or close down.
• What it means for employers and employees when annual leave is taken in advance.
• The employer can refuse annual leave requests if the employee has insufficient leave to cover the shutdown.

3. Processing and managing annual leave requests.

As the shutdown period is an established feature of some industries, an employer refusing requests for annual leave during the year is not deemed unreasonable. This is unless there are strong reasons to support the request. A best practice is documenting annual leave requests and their responses for future reference. For a better employee experience, provide your employees with a mobile app for self-service to request leave and record absences. This enables you to have the data in real-time and recorded for the future and compliance.

According to the Fair Work Act, employers are entitled to refuse requests for annual leave if the refusal is unreasonable. If employees don't have enough leave to cover a shutdown period, businesses may consider refusing annual leave requests.

4. Making use of other leave arrangements.

The employee can choose other leave entitlements to cover the shutdown period (at their own discretion), such as:

• Accrued days off
• Time off instead of overtime
• Annual leave in advance

An employer can deduct from the employee's final pay any money due equal to the amount paid in advance for any leave used in advance.

Communicating with your employees

Effective planning and clear communication are essential when preparing for a Christmas shutdown.

What an employer can and cannot do:

• The employer must provide written notice of the shutdown/close-down period (the length of the notice period varies from award to award, but it is four weeks or 28 days).
  
  
• Employers can ask employees with sufficient accrued annual leave to take the leave during the shutdown period.
  
  
• Employees may agree to take annual leave in advance during a temporary shutdown if their award permits it. Employees are under no obligation to agree to take annual leave in advance. Employers are entitled to deduct the monetary amount required to cover the annual leave in advance taken from an employee's final pay if there is a negative leave balance when their employment ends.
  
  
• An employer can ask an employee to take unpaid leave, but the employee can refuse, in which case the employee must pay the employee normal wages.
  
  
• Employers can get a written agreement from an employee to take unpaid leave during a temporary shutdown period. Employees are not obligated to agree but will not be paid for public holidays if they are on leave without pay.

• An employer cannot require an employee to take advance or unpaid leave during a temporary shutdown if the employee has insufficient leave.

The challenges of leave management

Businesses of all sizes can find managing employee leave requests during the holiday season challenging. The influx of level requests, the need for fair and equitable scheduling, and the potential for resource gaps can create significant challenges. Without proper planning and systems in place, businesses face operational hurdles and dissatisfied employees.

Managing leave effectively for payroll and compliance

Workforce management is a challenge without a robust system in place that both employers and employees understand. Using a comprehensive workforce management solution, such as Access Definitiv, can alleviate leave management complexity and ensure compliance with the law. By leveraging intuitive scheduling and employee self-service options, businesses ensure fair and efficient leave allocation whilst maintaining optimal staffing levels. Additionally, real-time visibility allows resource gaps to be adjusted proactively and seamlessly.

How can you streamline leave requests and approvals?

Access Definitiv automates leave requests and approvals. Employees submit their time-off requests through the self-service portal or mobile app, specifying their desired dates and reasons. Managers receive notifications and review and approve requests based on predefined rules or manual adjustments. This streamlines the process and eliminates manual paperwork and back-and-forth communication, saving time for employees and managers.

Optimise Resource Allocation

Access Definitiv extends beyond leave management and helps you optimise resource allocation. By analysing historical data and employee availability, the reporting helps you generate optimal schedules to meet business requirements. It also considers employee preferences and availability. This ensures that the right staff is available at the right time, minimising disruptions and maximising productivity.

Watch the 4-minute demo or Download the brochure to learn more. 

Conclusion

As the holiday season approaches, businesses must proactively address seasonal leave challenges and ensure compliance. Implementing a reliable workforce management system can streamline the process, alleviate administrative burdens, and ensure optimal resourcing. By embracing technological solutions, businesses can create a harmonious work environment during the festive period, fostering employee satisfaction and operational success.