Can you direct employees to take leave at Christmas?

It’s a busy time of year for my organisation, but the festive season is a slow period of the year for many organisations. With Christmas just around the corner it is important to understand your options for managing annual leave.

During slow periods of the year, an organisation can choose to temporarily close. This is often referred to as a “shut down”. Ultimately whether you can direct employees to take their leave depends on what is stated in their contract, your leave policy, and their industrial award or agreement.

I recommend that:

  • your organisation has a leave policy
  • all employment contracts refer to your organisation’s leave policy
  • the leave policy refers to the requirement for leave to be taken if the organisation shuts down
  • you check that under relevant industrial awards and agreements for your employees you can direct employees to take leave
  • you provide a reasonable notice period; four weeks is generally considered reasonable
  • the shutdown applies to everyone

If an employee does not have enough annual leave to cover the shutdown they have the option to take annual leave in advance, or to take unpaid leave. No employee can be forced to take unpaid leave during a shut down. Remember annual leave only accrues on paid leave.

As always, having an open conversation with your team is the most effective way to ensure the best outcome for your organisation.

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