South Australian Business News

Important changes to shutdown provisions in modern awards

Grace Forgione
Thursday, October 19th 2023

Did you know that the Full Bench of the Fair Work Commission standardised award shutdown provisions from 1 May 2023 in 78 Modern Awards? 

These changes are important as they will impact how businesses handle shutdown provisions, notably during the periods over Christmas and New Year which is soon approaching. 

It is especially important that businesses are prepared and understand the new provisions affecting them this 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.

The Fair Work Commission determined a model shutdown clause in 78 Modern Awards and resulted in the following:

  • An employer must give 28 days written notice of any proposed shutdown (or a shorter period when agreed with employees impacted)
  • Where reasonable, an employer may direct an employee to take a period of paid annual leave if the employee has an accrued entitlement
  • Should an employee not have sufficient annual leave to cover a shutdown period, an employee and employer may agree in writing for an employee to take leave without pay or advance an entitlement to annual leave
  • Employees will no longer be required to take leave without pay if they do not have sufficient annual leave or have not agreed to take leave in advance. The Fair Work Commission determined it was not fair for employers to direct employees to take leave without pay during a shutdown and that it was unfair and unreasonable.’

How could the new shutdown provisions impact 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.

Consider that this may result in increased cost to your business and may 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.

What should your business do? 

Check to see if the Award(s) that your employees are covered by are impacted. A list of the 78 Awards that are changing can be found below.

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. 

How can the South Australian Business Chamber help?

You can subscribe to our Modern Award service: PAYpack to keep up to date on our notifications affecting the Award: subscribe today here.

For the South Australian Business Chamber Members, 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. 

Not a Member? Not a problem. If you are not a the South Australian Business Chamber Member now is the right time to join.

Awards that have updated rules 

The following awards have updated rules on taking annual leave during a shutdown.

  • Aboriginal and Torres Strait Islander Health Workers and Practitioners and Aboriginal Community Controlled Health Services Award
  • Aircraft Cabin Crew Award
  • Airline Operations – Ground Staff Award
  • Alpine Resorts Award
  • Aluminium Industry Award
  • Ambulance and Patient Transport Industry Award
  • Animal Care and Veterinary Services Award
  • Aquaculture Industry Award
  • Asphalt Industry Award
  • Banking, Finance and Insurance Award
  • Broadcasting and Recorded Entertainment Award
  • Building and Construction General On-site Award
  • Business Equipment Award
  • Car Parking Award
  • Cemetery Industry Award
  • Cement, Lime and Quarrying Award
  • Cleaning Services Award
  • Clerks — Private Sector Award
  • Coal Export Terminals Award
  • Commercial Sales Award
  • Concrete Products Award
  • Contract Call Centres Award
  • Educational Services (Post-Secondary Education) Award
  • Electrical Power Industry Award
  • Electrical, Electronic and Communications Contracting Award
  • Fitness Industry Award
  • Food, Beverage and Tobacco Manufacturing Award
  • Gardening and Landscaping Services Award
  • Gas Industry Award
  • General Retail Industry Award
  • Graphic Arts, Printing and Publishing Award
  • Hair and Beauty Industry Award
  • Health Professionals and Support Services Award
  • Higher Education Industry — General Staff — Award
  • Horse and Greyhound Training Award
  • Hospitality Industry (General) Award
  • Hydrocarbons Industry (Upstream) Award
  • Joinery and Building Trades Award
  • Journalists Published Media Award
  • Legal Services Award
  • Local Government Industry Award
  • Manufacturing and Associated Industries and Occupations Award
  • Meat Industry Award
  • Mining Industry Award
  • Mobile Crane Hiring Award
  • Miscellaneous Award
  • Nursery Award
  • Nurses Award
  • Oil Refining and Manufacturing Award
  • Pest Control Industry Award
  • Pharmaceutical Industry Award
  • Plumbing and Fire Sprinklers Award
  • Poultry Processing Award
  • Premixed Concrete Award
  • Professional Employees Award
  • Racing Clubs Events Award
  • Racing Industry Ground Maintenance Award
  • Real Estate Industry Award
  • Registered and Licensed Clubs Award
  • Restaurant Industry Award
  • Road Transport (Long Distance Operations) Award
  • Road Transport and Distribution Award
  • Salt Industry Award
  • Seafood Processing Award
  • Security Services Industry Award
  • Silviculture Award
  • Storage Services and Wholesale Award
  • Sugar Industry Award
  • Supported Employment Services Award
  • Surveying Award
  • Telecommunications Services Award
  • Textile, Clothing, Footwear and Associated Industries Award
  • Timber Industry Award
  • Vehicle Repair, Services and Retail Award
  • Water Industry Award
  • Wine Industry Award
  • Wool Storage, Sampling and Testing Award.
Author

Grace Forgione

Workplace Adviser

Grace Forgione

Workplace Advisor
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