You have the right to direct employees to take annual leave during a Christmas/New Year shut down. However, as of 1 May 2023, if you employ a person covered by a modern award, you will need to check whether you need to meet the new notice requirements to exercise that right.

New changes in 78 modern awards require the employer to give the affected employees 28 days’ written notice of the shut down period. A shorter notice period may be agreed between the employer and the majority of relevant employees.

The written notice must be given to new starters joining after the notice as soon as reasonably practicable after being engaged.

If applicable, you will need to comply with these requirements to be able to direct employees to take paid annual leave during the shut down. Again, this direction must be in writing and must be reasonable. There is no guidance as to when such a notice is unreasonable. It will be rare that such a requirement would be unreasonable if the proper notice of the shut down is given.

The modern award provisions do not allow you to direct employees to take unpaid leave during a shut down period. Therefore, you will need make it clear to employees that annual leave requests will be refused if it results in insufficient leave being available during the regular shut down period.

Employees could also use rostered days off or time off in lieu of overtime to ensure employees are paid during the shut down. Other options include granting employees with insufficient leave accruals, paid annual leave in advance. These arrangements will need to be in writing and comply with relevant award provisions.

You could also give employees the option to take unpaid leave during the shutdown. Any agreement to do so must be recorded in writing, e.g. by exchange of emails or text message.

If you want to create a right to direct employees to take unpaid leave during a shut down period, you might want to negotiate appropriate provisions in employment contracts or enterprise agreements.