Navigating Annual Leave during the Holiday Period

It’s not uncommon for employers to ask employees to take leave during the holiday season. Similarly, if employees happen to accumulate an excessive leave balance, which many employers and modern awards define as 8 weeks of annual leave, employers may request employees to take some time off.

On the flip side, your business may require employees to work over the holidays, including public holidays. In this instance it is important to identify the specific obligations for full-time, part-time, and casual employees. For instance, under awards, penalty rates exist for working on public holidays, and you may be required to compensate your employees accordingly. Some awards offer flexibility, such as using alternative days off or other options instead of payment for the public holiday worked.

In case your employees are not bound by any awards, the relevant employment agreement will outline your obligations. For casual employees, they are entitled to the penalty rates only if they work on the specified day.

Can employees be asked to take unpaid leave during the shutdown?

In general, an employer can ask employees to take annual leave during a seasonal closure, such as between Christmas and New Year. Depending on the modern awards or enterprise agreements in place, there may be specific guidelines about annual leave usage, including during the Christmas period.

From 1 May 2023, many awards had updated rules regarding taking annual leave during a shutdown. Under the new rules:

• Employers may require employees to take paid annual leave during a temporary shutdown
• Employers must provide at least 28 days written notice of the temporary shutdown period to all impacted employees (the easiest way to do this is to have it outlined in policy unless it changes year to year)
• The requirement to take annual leave must be reasonable. The notice period can be reduced through an agreement between the employer and the majority of impacted employees
• Other options are available for employees who don’t have enough paid annual leave to cover the whole period such as:
  • using accrued time off
  • annual leave in advance, or
  • leave without pay.

It is also important to note that public holidays during the Christmas period, such as Christmas Day, Boxing Day and New Year’s Day, do not count toward annual leave and should be compensated accordingly.

What if an employee does not have enough accrued leave but refuses to take unpaid leave?

When an employee does not have enough accrued leave but refuses to take unpaid leave, it can create a difficult situation for both the employee and the employer. In this scenario, it is important for the employer to have a conversation with the employee to understand their concerns and see if there are any alternative solutions that can be explored.

One possible solution could be to allow the employee to work flexible hours or to work from home so that they can continue to earn an income while managing their personal obligations. Another option could be to explore the possibility of the employee taking on additional tasks or projects that can be completed within the normal workweek, thereby reducing the need for additional leave.

If none of these options are feasible, it may be necessary for the employer to insist that the employee take unpaid leave to avoid any potential legal or financial repercussions. It is important for the employer to communicate this decision clearly and to provide support and guidance to the employee throughout the process. Ultimately, the goal should be to find a solution that is fair and reasonable for both the employee and the employer.

What if you require employees to work during the holiday period, including public holidays?

Requiring employees to work during holiday periods, including public holidays, can be a complex issue. It is important to consider the legal requirements and the impact on employee morale and work-life balance.

In most countries, there are laws that regulate working hours and holiday entitlements. Employers must ensure that they comply with these laws, which may include paying employees extra for working on public holidays or providing additional time off in lieu. Employers should also consider the impact on employee morale and work-life balance, as forcing employees to work during holidays may result in increased stress and reduced productivity.

It is advisable to have clear policies in place regarding holiday work, including how employees will be selected to work on holidays and what compensation they will receive. Communication is key, so employers should ensure that employees are aware of these policies and understand their rights and responsibilities. By taking a thoughtful and proactive approach to holiday work, employers can maintain a productive and happy workforce.

Do you need to pay penalty rates on public holidays?

Employers are required by law to pay a higher rate of pay to employees who work on public holidays. This higher rate of pay is often referred to as ‘penalty rates’. The exact amount of penalty rates can depend on a number of factors, such as the employee’s award or agreement, the type of work being performed, and the time of day or night that the work is performed.

Penalty rates are designed to compensate employees for working on days that are traditionally seen as times for rest and relaxation, such as Christmas Day, Easter Sunday, and New Year’s Day. It is important for both employers and employees to understand their rights and obligations when it comes to public holiday pay and penalty rates. Employers who fail to pay the correct penalty rates can face penalties and legal action, while employees who are underpaid can seek redress through their union or through the Fair Work Commission.

Remember, calculating annual leave during the Christmas and New Year period requires special consideration for permanent staff. If an employee typically works on a day that falls on a public holiday, that day must be counted as a public holiday instead of a day of annual leave.

It is always best to discuss holiday plans with your employees well in advance to avoid misunderstandings or conflicts.

If you have any questions about your obligations as an employer regarding the holiday period, call 1300 445 687 and our experienced HR Specialists can assist.