‘Tis the Season to Be Compliant: Navigating Holiday Shutdowns and Leave Entitlements in 2024-25

With Christmas and the New Year fast approaching, employers should consider how they can best manage their work arrangements over the festive season. This includes if the workplace will be closed or open over the holiday period and ensuring that employees are paid correctly for the upcoming public holidays.

Employers may close their workplace over the festive season (known as a ‘shutdown’ or ‘close down’), but if they do so there are rules and requirements regarding the management of employees that must be followed.

We discuss the important employment law considerations employers should be aware of during the festive season, including payment obligations, below.

Can employers require an employee to use their leave entitlements over the shut down?

An employer is only able to direct its award/enterprise agreement-covered employees to use their annual leave over a shutdown period if the employees’ award or enterprise agreement allows it.

Although awards and enterprise agreements typically allow employers to direct their employees to use their annual leave over shutdown periods, they may contain certain conditions or requirements in respect to shutdowns. For example, some awards require employers to provide employees with a minimum period of notice prior to a shutdown (such as 4 weeks or 28 days), or stipulate that a workplace can only shutdown during certain periods of time.

If the award or enterprise agreement does not contain any rules about shutdowns, employers cannot direct their employees to use their annual leave during the shutdown period unless the employee agrees to do so.

Alternatively, if an employee is not covered by a award or enterprise agreement, employers are only allowed to direct the employee to use their leave entitlements over the shutdown period if the direction is reasonable under the National Employment Standards (NES).

What if an employee doesn’t have enough leave to cover the shutdown period?

If an employee does not have enough leave to cover the shutdown period, the relevant award or enterprise agreement must be considered to see what is permissible.

Employers are generally able to provide an employee (with their agreement) to either:

• Annual leave in advance; or
• Unpaid leave.

In the event that an employee is not covered by an award or enterprise agreement, an agreement can still be made to take unpaid leave or annual leave in advance; but the employee cannot be directed to do so.

Can I require my employees work on a public holiday?

The NES confirms that:

• an employee is entitled to be absent from work on a public holiday, unless their employer has made a reasonable request for the employee to work on the public holiday; and
• an permanent (full-time or part-time) employee is entitled to be paid their base rate of pay for their ordinary hours of work on that day, if they are absent from work due to the public holiday (see more detail below).

Employers are entitled to reasonably request employees to work on a public holiday. Employees, however, can refuse to work on a public holiday on reasonable grounds.

A request should be made for each public holiday with an opportunity to respond. Such requests should be more than just implied (i.e. the request should be more than just rostering the employees to work on the public holidays and not discussing it with them).

To help decide if a request to work on a public holiday is reasonable, there are a number of factors to consider, including, but not limited to:

• the nature of the workplace and the work to be completed;
• whether employees will receive additional pay (e.g. penalty rates);
• personal circumstances, such as family/caring responsibilities of the employee; and
• the amount of notice provided by the employer when making the request.

What payments need to be made on a public holiday?

If a workplace remains open throughout the festive season, employees who work on public holidays may be entitled to public holiday penalty rates under any applicable award or enterprise agreement.

Alternatively, if the workplace is closed on the public holiday  full-time and part-time employees are entitled to be paid their base rate of pay for the ordinary hours they would have worked on that day had it not been a public holiday. Casual employees are generally not entitled to any payment for a public holiday that they do not work.

Which public holidays should I be aware of?

To confirm the upcoming public holidays in your state or territory, please see the table below.

Please also note that as Australia Day will fall on a Sunday in 2025, it will instead be observed on Monday, 27 January 2025 in all states and territories.

If you require assistance with your obligations regarding public holiday penalty rates, contact HR Legal.