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Employer's Guide to the Festive Season Part 1: Christmas and New Year shutdown periods – how to avoid the FWC’s naughty list

14 November 2019
Glass enclave reception area of a corporate building
With the Christmas/New Year period approaching fast, our gift to you is a Christmas-themed article series. In this three-part series, Michelle Dawson will explore the key issues faced by employers that, if not handled carefully, can quickly turn the holiday season into a not-so-wonderful time of the year for employers.

In particular, this series will look at:

  1. The dos and don'ts of holiday shut-down periods;
  2. Key things to consider when utilising casual employees during the holiday rush; and
  3. Why it's important to keep the Christmas cheer in check at end of year celebrations.

Part 1: Christmas and New Year shutdown periods – how to avoid the FWC’s naughty list

How your business approaches the Christmas/New Year period will be dictated by its operational requirements. For some businesses this means all hands on deck and for others the business may shut down altogether. This article explores the key issues employers need to consider before approaching shutdown periods or refusing annual leave requests during this busy period.

The Christmas and New Year period can be difficult for many businesses to navigate. For some it is traditionally a quiet period, but for others it is the busiest time of year requiring all elves in the workshop. In this article we take a look at some of the do's and don’ts for employers when it comes to the Christmas and New Year period.

When can an employer force Christmas and New Year shutdown periods?

Many modern awards, enterprise agreements and contracts of employment permit an employer to require its employees take annual leave during the holiday period. Where an employee does not have sufficient leave to cover any shutdown period, some modern awards and enterprise agreements expressly provide that an employer may direct an employee to take unpaid leave during this period. 

Employers are generally required to consult employees before requiring them to take any annual leave. In Civil Air Operations Officers' Association of Australia v Airservices Australia [2019] FCA 1542, Airservices Australia recently learnt that overlooking this step can be costly after it was ordered to pay penalties of over $10,000. 

Employers should ensure that they familiarise themselves with any applicable modern awards, enterprise agreements and contracts of employment, including any requirement to consult employees before requiring any employee to take annual leave. 

Can you require an employee to work over the Christmas and New Year period?

If an employee requests to take annual leave during this period (either in full or in part), an employer cannot unreasonably refuse the request. The question comes down to, what is reasonable?

In Adriana Stevens v Horsley Park Supermarket Pty Ltd T/A Carlo's IGA Horsley Park [2017] FWC 4626, the Fair Work Commission (FWC) have provided guidance as to what circumstances ought to be considered, including:

  • The amount of notice the employee has given the employer (and its knowledge as to the purpose of the leave request);
  • The operational requirements and size of the employer’s business (including its ability to adequately cover the employees absence of the employee whilst on leave); and
  • Whether an employer, directly or indirectly, gave the employee an ongoing expectation that the leave may be approved.

The FWC ultimately held that it was unreasonable for Carlo’s IGA to refuse Ms Stevens leave request, despite acknowledging that the request was during a notably busy period and when the employer had a leave block out in place.  This was because Carlo’s IGA had:

  • Been on notice that Ms Stevens wished to take leave for an international holiday for some 12 weeks’ prior to her departure;
  • Escalated the matter to senior managers (giving her a reasonable expectation that her request would be approved); and 
  • Not notified her of the refusal until 2.5 weeks prior to her departure (at which point Ms Stevens had already paid for flights etc.).

If you are unsure what your obligations are with respect to the Christmas and New Year period, please do not hesitate to contact a member of our Australian Employment team.

We would like to acknowledge the contribution of Nicole Davis to this article.

Read our Employers Guide to the Festive Season Part 2 and Part 3

Further Reading