Christmas Annual Leave: what are the rules?

Christmas Annual Leave - can employees be forced to use their leave?

Regardless of what kind of business you operate, managing annual leave over the Christmas period can be quite tricky. For companies who stay open during the Christmas season, particularly in the service industry or the retail sector, there is the annual ‘Christmas Holiday Lottery’ with employees each vying for coveted days, particularly between Christmas and New Year. For many other businesses, the days between Christmas and New Year are reminiscent of an old gold rush town, with only the occasional tumbleweed blowing through. It is common practice for businesses to operate on a skeleton staff or completely close-up shop during this period. For many employees, this is a welcome break to spend time with their families or relax at the beach, but for some employees, it is an autocratic imposition on the use of their annual leave entitlements. 

First things first, do your employees know you're "closed for Christmas"?

While it may be common practice, compelling your employees to use their annual leave is not always lawful. The law on annual leave varies from industry to industry, and employers should, in the first instance, refer to their industry award or agreement. Most awards specify whether employers can dictate when employees take their leave, along with any relevant requirements as to duration, frequency and notice periods. The Graphics, Arts, Printing and Publishing Award, for example, provides that employers may enforce compulsory leave, but not for more than 14 days and not more than 2 periods in a single year. Many awards, like the Cotton Ginning Award 2010, are silent as to annual close-downs. In these circumstances, you may negotiate with your employees and come to an agreement. Many employers will give their employees an extra day of paid leave in consideration for employees agreeing to take annual leave at Christmas. This is a win-win option, particularly for companies who want to close for the three days between Christmas and New Year. If your award is silent as to annual close-downs, and you cannot reach an agreement, then you may not force your staff to use their annual leave. 

What about Christmas Day specifically?

If your award does not permit compulsory annual leave for office closure, you may be able to compel some staff members who have accumulated an excessive amount of annual leave entitlements to take some holidays over the Christmas period. What is ‘excessive’ will be defined in the award, but in most cases, will be 8 weeks. You should be aware that not all awards allow you to enforce leave in these circumstances, and some awards may require you to enter into negotiations and undertake other administrative steps before you can compel your staff to take their leave.  Always check the relevant award or agreement before taking any steps.

It’s beginning to look a lot like Christmas...

 Where you are permitted to enforce an annual leave period, the Award will also state what notice you must provide to your employees.  In most cases, this will be not less than 4 weeks’ written notice.  The notice should clearly set out the dates on which the business will be closed and how much annual leave staff will be required to take. You should check your specific industry award to ensure that you comply with the right notice period.  

We all love Christmas pudding, and we won’t go until we get some.

The most common position under awards where compulsory leave is permitted is that employees who have not accrued enough annual leave entitlements will take unpaid leave for the period of the closure. You should always refer to your industry award or agreement to ensure you comply with your minimum obligations. If the award is silent, you may negotiate with your employee to pay them leave in advance (providing your award does not prohibit it).  If however your employee does not agree to unpaid leave or leave in advance, you must pay them their usual wages for the period of the closure. 

‘tis the season to be jolly...

The award or industry agreement in place is designed to provide the minimum level of protection for your employees.  You, and your employees, are always entitled to negotiate more, but never less than what is provided for in the award. If you are unsure about your award or industry agreement you can ask Fair Work for some guidance or contact us.