New Shutdown Rules for Modern Awards: What is changing?

With the festive season around the corner, employers and employees need to start planning how their businesses will operate during the end-of-year holiday season.

Many businesses get busier and may need their employees to work more hours and on public holidays. Other businesses may shut down (also known as a ‘close down’) or reduce their staff numbers.

Since 1 May 2023, many awards have updated rules on taking annual leave during a shutdown.

The New Rules

The new rules mean:

• 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 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;
• An employee who doesn’t have enough paid annual leave to cover the whole period can form an agreement with their employer for other options for the days not covered, such as:
• • using accrued time off
  • annual leave in advance, or
  • leave without pay.

The employee will be paid for any public holidays during the shutdown period that fall on days they would normally work.

Whom do the changes apply to?

These new rules apply to employees and employers covered by one of the affected awards, amongst which:

• Banking, Finance and Insurance Award
• Building and construction
• Clerks—Private Sector Award
• Commercial Sales Award
• Food, Beverage and Tobacco Manufacturing Award
• General Retail Industry Award
• Manufacturing and Associated Industries and Occupations Award
• Miscellaneous Award
• Professional Employees Award
• Storage Services and Wholesale Award

To check if your award has changed, access it directly from the FairWork List of awards page.

You can also learn more about shutdowns at Direction to take annual leave during a shutdown.