Close downs during the festive season – How best to manage your obligations

Now that the festive season is upon us, some businesses may decide to ‘close down’ some or all of their operations over this traditionally quieter period of the year. There are some important factors that a business needs to be aware of when looking to close down over this period.

 

Can I direct my employees to take leave?

An employer can direct an award or enterprise agreement covered employee to take annual leave during a close down period if the award or enterprise agreement expressly allows an employer to do so. Provisions in these instruments will often have certain requirements that an employer will need to adhere to in order to make this direction reasonable.  A common requirement in awards is for an employer to provide a certain amount of notice if they intend to direct an employee to take annual leave. For example, under the General Retail Industry Award 2020, employers must provide at least 4 weeks’ notice of a direction to take annual leave during a close down.

Not being aware of this notice period and subsequently not having enough time to give employees notice, could be detrimental to whether this direction is reasonable or not. Therefore, it’s important to double check the provisions in your binding instruments as soon as possible to allow enough time to comply with these provisions.

Awards and agreements should also be read in conjunction with employment contracts where an employment contract contains provision relating to end of year close downs.

 

What if my award or agreement is silent?

If an industrial instrument is silent on an employer’s ability to direct an employee to take annual leave during a close down, an employer will not have an ability to direct an employee to take annual leave during this time. Employers will need to consider alternative arrangements such as reaching mutual agreement with the employee to take leave over this period. If an agreement cannot be reached, the employer may be obligated to pay the employees ordinary hours over this time, even if the business is closed.

 

What if my employees don’t have enough accrued annual leave?

If an employee does not have the required amount of annual leave to cover them for all or a portion of the close down period, an employer can mutually agree with the employee to take authorised unpaid leave. However, if the award or agreement does not allow for unpaid leave to be taken during an annual close down, and there is no agreement between the employer and the employee to utilise authorised unpaid leave, the employer may be obligated to pay the employee for the ordinary hours over this time, even if the business is closed.

For this reason, employers should consider allowing employees to continue to work over the close down period, or maintaining a skeleton staff, even with the business being closed down. Employees should be paid their normal wages over the close down period, keeping in mind that some of these days may be public holidays, where penalties may apply. Employers should also be mindful of health and safety risks such as employees working alone.

Some modern awards and agreements have provisions to be able to provide employees access to annual leave in advance.  However, accessing this entitlement must be by agreement. An employer does not have an obligation to agree to such a request and should look at every request on an individual basis. The ramifications of allowing an employee to access annual leave in advance may leave the employer open to a financial loss, as it may be difficult for the employer to recoup this amount, if the employee leaves the business before they have accrued it back. Annual leave in advance agreements should always be in writing.

 

What if my employees are not covered by an award of agreement?

Award and agreement free employees are entitled to the minimum safety net, the National Employment Standards (NES), under the Fair Work Act 2009 (Cth) (FW Act). The Act allows employers to direct employees to take annual leave under section 94(5), but only if the request is reasonable. In considering the factors of whether a request is reasonable, consideration should be given to:

  • The notice given to employees. Generally, the more notice you can give to an employee about the direction to take annual leave, the more reasonable the direction.
  • Is it common practice to close down the business at the same time every year? An employer may want to make the employee aware of this upon their initial engagement with the business which could include a provision in the employment contract.
  • The length of the close down and the subsequent period of leave needed to cover this period. Longer periods of leave can be considered unreasonable as an employee will utilise a larger portion of their annual leave accrual. One to two weeks should be used as a guide, anything over and above this may be unreasonable.

 

Please note that the above information applies to employers and employees in the national system only. If you are a state system employer, or if you would like more information on this subject or any other matters, please contact the CCIWA Employee Relations Advice Centre on (08) 9365 7660 or email advice@cciwa.com

Fair Work Commission responds to COVID-19 Pandemic: Award Variations

In a statement released by the Fair Work Commission Full Bench (FWCFB) on 1 April 2020 they provided their provisional view on temporary changes to be made to 103 Modern Awards in response to the current COVID-19 Pandemic. These changes are aimed at providing more flexibility for employers and protection for their employees during these unprecedented times. The proposed changed include the ability to access unpaid leave, which the FWCFB refers to as “unpaid pandemic leave”, and to access annual leave entitlements in a flexible fashion, specifically the ability to take twice the amount of accrued annual leave at half the pay to assist in getting through periods where work is not available.

The FWCFB stated there was a ‘regulatory gap’ in the current award safety net for employees who are required to self-isolate due to COVID-19. The temporary absence provisions, found under section 352 of the Fair Work Act 2009 (the Act), only protect an employee from dismissal on the grounds of illness or injury. Under the current provisions a person who is self-isolating, but who is not ill or injured, is not protected by section 352 during a period of leave they are needing to take due to government directives, and theoretically might be terminated by an employer for that absence.

Subsequently, the FWCFB released a decision on 8 April 2020 confirming variations to 99 Modern Awards to fill the ‘regulatory gap’. Some industries, including construction, maritime and mining and resource have not been varied at this stage. However, the FWCFB has stated that this is only phase 1 and in the longer-term modern awards in these industries may be varied as part of a later phase.

The variations include:

Unpaid pandemic leave

An entitlement for an employee to take up to 2 weeks’ unpaid leave if the employee is required, by government or medical authorities or acting on advice of a medical practitioner, to self-isolate or is otherwise prevented from working by measures taken by government authorities due to the COVID-19 pandemic.

Any employee will be required to provide notice to their employer as soon as practicable (which may be after the period of leave commences) and will need to provide evidence to their employer that is similar to any other period of medical leave.

Annual leave at half pay

The ability for employers and employees to agree in writing to an employee taking a period of annual leave that is twice as long, at half pay. Any agreement must be retained as an employee record.

It is important that employers are aware that any employee who is entitled to the benefit of this variation will have a workplace right under s341(1)(a) of the Act, so any adverse action taken against an employee for exercising this right, may lead to a general protections claim.

These variations will apply until 30 June 2020, but may be extended by the FWC.

A list of affected Modern Awards can be found at the end of this article.

For more information or if you would like to subscribed to our Award Updating Service, contact CCIWA’s Employee Relations Advice Centre on (08) 9365 7660 or email advice@cciwa.com.

 

Modern Awards Affected:

Aboriginal Community Controlled Health Services Award 2010

Aged Care Award 2010

Air Pilots Award 2010

Aircraft Cabin Crew Award 2010

Airline Operations-Ground Staff Award 2010

Airport Employees Award 2010

Alpine Resorts Award 2010

Aluminium Industry Award 2020

Ambulance and Patient Transport Industry Award 2020

Amusement, Events and Recreation Award 2010

Animal Care and Veterinary Services Award 2020

Aquaculture Industry Award 2020

Architects Award 2010

Asphalt Industry Award 2010

Banking, Finance and Insurance Award 2020

Book Industry Award 2020

Broadcasting, Recorded Entertainment and Cinemas Award 2010

Business Equipment Award 2010

Car Parking Award 2020

Cement, Lime and Quarrying Award 2020

Cemetery Industry Award 2020

Children’s Services Award 2010

Cleaning Services Award 2010

Clerks – Private Sector Award 2010

Commercial Sales Award 2010

Concrete Products Award 2010

Contract Call Centres Award 2010

Corrections and Detention (Private Sector) Award 2020

Cotton Ginning Award 2020

Dry Cleaning and Laundry Industry Award 2010

Educational Services (Post-Secondary Education) Award 2010

Educational Services (Schools) General Staff Award 2010

Educational Services (Teachers) Award 2010

Fast Food Industry Award 2010

Fitness Industry Award 2010

Food, Beverage and Tobacco Manufacturing Award 2010

Funeral Industry Award 2010

Gardening and Landscaping Services Award 2020

General Retail Industry Award 2010

Graphic Arts, Printing and Publishing Award 2010

Hair and Beauty Industry Award 2010

Health Professionals and Support Services Award 2010

Higher Education Industry-Academic Staff-Award 2010

Higher Education Industry-General Staff-Award 2010

Horse and Greyhound Training Award 2010

Horticulture Award 2010

Hospitality Industry (General) Award 2010

Journalists Published Media Award 2010

Labour Market Assistance Industry Award 2010

Legal Services Award 2020

Live Performance Award 2010

Local Government Industry Award 2010

Mannequins and Models Award 2010

Manufacturing and Associated Industries and Occupations Award 2010

Marine Tourism and Charter Vessels Award 2010

Market and Social Research Award 2020

Meat Industry Award 2010

Medical Practitioners Award 2020

Miscellaneous Award 2010

Nursery Award 2020

Nurses Award 2010

Passenger Vehicle Transportation Award 2010

Pastoral Award 2010

Pest Control Industry Award 2010

Pharmaceutical Industry Award 2010

Pharmacy Industry Award 2010

Poultry Processing Award 2010

Premixed Concrete Award 2020

Professional Diving Industry (Recreational) Award 2010

Professional Employees Award 2010

Racing Clubs Events Award 2010

Racing Industry Ground Maintenance Award 2020

Rail Industry Award 2010

Real Estate Industry Award 2020

Registered and Licensed Clubs Award 2010

Restaurant Industry Award 2010

Road Transport (Long Distance Operations) Award 2010

Road Transport and Distribution Award 2010

Salt Industry Award 2010

Seafood Processing Award 2020

Security Services Industry Award 2010

Silviculture Award 2020

Social, Community, Home Care and Disability Services Industry Award 2010

Sporting Organisations Award 2020

State Government Agencies Award 2020

Storage Services and Wholesale Award 2010

Sugar Industry Award 2010

Supported Employment Services Award 2010

Surveying Award 2020

Telecommunications Services Award 2010

Textile, Clothing, Footwear and Associated Industries Award 2010

Timber Industry Award 2010

Transport (Cash in Transit) Award 2010

Travelling Shows Award 2020

Vehicle Manufacturing, Repair, Services and Retail Award 2010

Waste Management Award 2010

Water Industry Award 2020

Wine Industry Award 2010

Wool Storage, Sampling and Testing Award 2010