New workplace regulations released on 1 May 2023 prohibit some employers from directing their employees to take unpaid leave during office closures.
This change has direct implications for both employers and employees, particularly as the Christmas and New Year period approaches. Traditionally, employers could direct employees to take their annual and/or unpaid leave during the Christmas and New Year shutdown periods, if they lacked sufficient annual leave balance. However, a pivotal development in labor laws is changing this habit for some employers, aiming to protect employees’ rights and entitlements during shutdowns.
After a decision by the Fair Work Commission on 22 December 2022 there has been amendments to 78 modern industry awards. The amendments introduce a clause that prohibits those affected employers from forcing employees to take unpaid leave during business shutdown periods. This change represents a significant shift in the way employers manage their workforce during these critical holiday periods.
Additionally, this change mandates those employers must provide their employees with at least 28 days’ written notice, outlining the dates and details of the temporary shutdown period.
Impacted Modern Awards:
From 1 May 2023, these new rules apply to 78 industry awards. These include, but are not limited to, industries such as:
- Building and construction;
- Hair and beauty;
- Hospitality; and
- Real estate.
Visit this link to check if this change is applicable to your industry award.
Effects on Employers and Employees:
- Employers cannot direct employees with sufficient annual leave balances to take annual leave during shutdown periods.
- Employers can mutually agree with employees to take paid annual leave during the shutdown period, provided this agreement is in writing.
- For employees with insufficient leave balances, employers can mutually agree with employees to take unpaid leave during the shutdown period, with the genuine consent of the employee and a written agreement.
- Alternatively, if the applicable award allows, employees can agree to take annual leave in advance during the shutdown period.
- If an employee lacks sufficient leave and does not consent to unpaid leave or leave in advance, employers can allow them to work if it aligns with business needs, or they must pay the employee for the unutilised annual leave.
- Employees should be aware of their entitlements regarding leave during workplace shutdown periods.
- They can negotiate paid or unpaid leave with their employers, as outlined above, based on their leave balance and mutual agreement.
The recent changes in labor laws regarding business shutdown periods and unpaid leave represent a significant shift in favour of employees’ rights and protections. Employers and employees alike ought to be well-informed about these changes to ensure compliance and fair treatment during these critical periods.
Contact our Employment Law team at Greenhalgh Pickard for tailored advice on how this change impacts you.
Ph: 07 5444 1022
The information contained in this article is for general informational purposes only and is not intended to provide legal advice or substitute for the advice of a professional. This information does not consider your personal circumstances and may not reflect the most current legal developments. Should you need advice, please contact our firm for targeted information relating to personal your situation.
Greenhalgh Pickard’s Employment Law Team