The Christmas period is a common time for businesses to close down, but strict rules apply. This blog post examines what is required when implementing an annual close down. Modern awards allow employers to direct employees to take annual leave in reasonable circumstances, including annual close downs. Some awards limit the number of close downs, some awards specify the length, and some awards do not expressly provide for close downs.

Award/agreement free employees must take annual leave if the employer requires it. This could be set out in an employment contract or company policy. Modern awards with close down provisions require employers to give employees notice when directing annual leave to be taken. The notice period is generally 4 weeks or 1 month, with some awards requiring 2 months notice.

If an employee does not have enough annual leave accrued to cover the close down period, the employer may place the employee on unpaid leave. However, this would only apply in limited cases. Employers who intend to implement an annual close down period must manage annual leave requests from employees to ensure that employees will have sufficient annual leave accrued at the time of the close down.