Critical Changes to Unpaid Leave and Temporary Shutdowns 

by Nov 29, 2023All Posts, Human Resources, Industrial Relations

In the past, when a shutdown was approaching, a business would close shop and workers would take time off. Workers in a position to take annual leave would do so, and those that found themselves short would usually take unpaid leave. However, rules have changed surrounding this and it is critical that employers have an understanding of worker rights in response.  

Essentially, you can no longer ‘direct’ a worker to take unpaid leave if they have used all of their accrued hours, you now require their agreement. Whether this impacts you will depend upon how you currently service leave within your business.  

Award Covered Workers 

There are 78 modern awards that will be impacted by the introduced change, in which employers will no longer be able to direct leave, but rather reach agreement. What this will mean for many employers is an amendment to employment agreements that specifies your ability to ‘direct’ unpaid leave. Alongside this, you will need to review the notification periods required surrounding a shutdown period (which is usually 28 days) and initiate such in a written format.  

In accordance with the new rules, if a worker does not agree to take leave within the temporary shutdown period, and if it is not written into a signed agreement, the worker will be entitled to payment within this period.  For employers this may mean: 

  • Arranging for the worker to work within the shutdown period, if this is possible within your line of business; or 
  • Coming to an agreement to pay the worker for the time that is not covered by annual leave, despite no work being undertaken.  
Award Free Workers 

For workers that are not on Awards, employers can continue to ‘direct’ them to take leave, however they must ensure that the requirement is ‘reasonable’. In most circumstances, the shutting down of a business over Christmas IS considered reasonable, as long as the appropriate amount and correct form of notice is given.  

Act Now 

Regardless of how you engage workers, it is critical that you review your leave policy and procedures, and existing employment contracts immediately. Considering the required 28 days written notice (minimum) to be given to workers prior to an intended shutdown period, and the fact that Christmas is only 26 days away, we must urge you to act on this now.  

If you disregard this, Christmas may become quite the business expense this year, as you find yourself having to pay workers for their normal hours. For more information surrounding this or advice in navigating these changes, call the Assurance HR specialists today on 1800 577 515 or click here to schedule a free consultation.  

The AHR team can equip you with the advice, tools, and templates required to see you navigate and manage your HR concerns. We can do it with you, working together to develop systems that will allow you to seamlessly manage your shutdown period. This may include working with you to review and update leave policies, implementing a ‘Blackout’ or ‘Shutdown’ period within these policies, and ensuring that this is communicated to workers appropriately and correctly. OR, we can do it for you, stepping in as your HR Department, reviewing, planning, scheduling, and communicating upcoming changes and intended shutdown or blackout periods on your behalf.  

For more information on how you can prepare your business for an upcoming lull or peak season (shutdown or blackout period), see our article, Employers – Are You Prepared for Christmas? 

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