The Full Bench of the Fair Work Commission recently handed down a decision to vary shutdown provisions in 78 Modern Awards. These changes will impact how businesses handle shutdown provisions, notably during the periods over Christmas and New Year.
For clarity, a shutdown means a period of closure where an employer will direct their employees to take annual leave while the business ceases to operate.
For businesses who are covered by the 78 Modern Awards impacted, the Fair Work Commission determined these awards needed to include model shutdown provisions, and this model clause would replace all pre-existing provisions for a shutdown.
The Fair Work Commission have determined it was not fair for employers to direct employees to take leave without pay during a shutdown and that it was “logically fallacious, unfair and unreasonable that an employee could be required to take leave to which the employee has no entitlement in the first place with the result that the employee’s right to take leave with pay, at a time suitable to the employee, would be impacted”.
The Fair Work Commission determined a model shutdown clause would be inserted in 78 Modern Awards and will result in the following:
What does this mean for your business?
Employers need to be aware these changes will mean permanent employees who do not have sufficient annual leave entitlements, and who have not agreed to take annual leave in advance, or to take leave without pay, will be entitled to receive their usual wages during a proposed shutdown period.
This will not only be a cost to your business but will also create a level of disparity between those employees who do agree to take leave without pay or annual leave in advance, and those employees who are not covered by an Award or an Award not included in this decision.
Employers need to carefully review their leave policies and ensure they are compliant with the new shutdown provisions.
Employers will also need to plan shutdown periods in advance to ensure the required 28 days’ notice is provided. Careful consideration throughout the year of employees leave balances and leave requests will need to be considered.
How can the South Australian Business Chamber help
Subscribers to our Moder Award service, PAYpack, will receive notification and an update if your Award is part of the 78 Awards impacted. If you are not a subscriber to PAYpack, subscribe today here.
Our Business Advice Hotline is only a phone call away and our advisors can talk through these changes with you.
Call (08) 8300 0000 (select option 1). Our workplace consultants who are experts in industrial relations can assist you with drafting or updating your leave policies and employment contracts.
Contact them today through our Business Advice Hotline.
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