Changes to Shutdown Provisions
As of 1 May 2023, the Fair Work Commission will be enforcing a new provision relating to shutdown periods and directing employees to take unpaid leave.
The conditions around planning and directly employees for a shutdown period will depend on the employee’s applicable modern award or enterprise agreement.
Employees can say no to unpaid leave!
Under this new regulation, eligible employees who do not have enough accrued annual leave are now entitled to refuse unpaid leave during the shutdown periods.
Instead, these employees may be able to continue working during the shutdown or receive additional paid annual leave if no suitable duties are available.
Impact for employers
Employers now will need to take numerous steps before communicating shutdown periods to employees to ensure they remain within the scope of the new provision.
Employers should proactively plan for shutdown periods, including Christmas and the New Year period. Some steps employers should take include:
Identify and be aware of your employee award coverage and what is required under such award for shutdown periods.
Review any current procedures and guidelines that govern annual shutdowns and update documents relating to employees impacted by the change.
Update payroll and employee management systems to ensure employees can access leave in advance and that employees leave accruals are up to date.
Scope out all shutdown dates well in advance. Communicate with employees as early as possible.
Summary of changes
Employers must give employees a minimum of 28 days’ written notice of any temporary shutdown period.
Employers may direct employees in writing to take a period of paid annual leave if the employee has an accrued entitlement.
If an employee does not have sufficient annual leave to cover the whole shutdown period, the employee may take annual leave without pay (agreement must be in writing), or annual leave in advance.
Employees can no longer be required to take leave without pay if they do not have sufficient leave to cover the whole period.
Infinity HR is well-equipped and readily available to assist your business in preparing for this change. Please reach out to us if you would like us to assist with any of the above.