Business Shutdowns – Limitations on Employers – Construction Lawyers Melbourne – Level Playing Field Lawyers

Business Shutdowns – Limitations on Employers

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The Fair Work Commission is putting a stop to employers directing employees to take leave without pay during any business shutdown periods
If your business has shutdown periods, it’s important to know if this applies.
Seventy-eight awards are being amended by inserting a model clause into the award, including;

Building and Construction General On-site Award 2020
Concrete Products Award 2020
Electrical Power Industry Award 2020
Manufacturing and Associated Industries and Occupations Award 2020
Plumbing and Fire Sprinklers Award 2020
Premixed Concrete Award 2020
Timber Industry Award 2020

The full decision can be found in the “4 yearly review of modern awards—Plain language—Shutdown provisions” document from the Fair Work Commission. Even if your award isn’t listed, it could be subject to multi-employer bargaining agreements (which may mean this limitation is included).
The change requires businesses to:

give employees 28 days’ written notice of any holiday shutdown;
give written notice to employees hired within 28 days of the shutdown period as soon as reasonably practicable after hiring them; and
only direct an employee to take annual leave during the shutdown period if it has been accrued.

Fair Work Example

James is a new employee who started in December. Your business plans on shutting down over the Christmas break but James has not accrued enough annual leave. What are the options if you can’t direct him to take leave without pay?

Agree with James in writing to take leave without pay;
Agree with James to take annual leave in advance (before it has been accrued);

If James does not agree to option 1 or 2, you will need to find work for him, or pay him for the shutdown period.
However, you can reasonably refuse an employee’s annual leave request throughout the year if it means they won’t have enough leave to cover a shutdown period. And employees must take annual leave if they have accrued enough to cover a shutdown.

Key takeaways

Plan employees’ leave throughout the year to cover any shutdown periods and consider ensuring employees have a minimum leave balance to cover shutdown periods
Check in with your employees throughout the year on their annual leave plans
We recommend having a suitably drafted annual leave policy and clause in employee contracts reflecting these changes.

Contact your legal professional if you want to know more.

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