The Fair Work Commission has been undertaking its 4 yearly review of Modern Awards, and there are some important changes coming in on 1 May 2023 in relation to notice and leave requirements for business shutdowns.
What is a shutdown?
A temporary business shutdown occurs where an employer temporarily closes its workplace, or part of its business, typically during slow business periods. For some businesses, this may occur at Christmas. During a shutdown period, employers can require employees to take leave if the request is reasonable and sufficient written notice is provided. Additional requirements may be found in Modern Awards, enterprise agreements and contracts of employment.
What was the Fair Work Commission concerned about?
The review was addressing whether the existing shutdown clauses in 78 of the Modern Awards meet the modern award objectives in Section 134 of the Fair Work Act, particularly in relation to requiring employees to take leave without pay if they did not have sufficient accrued paid annual leave. The Commission decided they didn’t, and has drafted a new model clause for those Awards.
What is changing?
A new model clause is being implemented into the affected Modern Awards that has the following requirements:
???? Employers must give at least 28 days written notice (or longer if stipulated) of a temporary shutdown period.
???? Any direction to take paid annual leave must be in writing and ‘reasonable’.
???? An employer cannot require or direct an employee to take unpaid leave during a shutdown period unless this has been expressly agreed.
???? Employees must be able to take annual leave in advance of accrual.
What does this mean for employers?
We know you’re probably not thinking about Christmas shutdowns yet, but if you already have an idea of dates, it’s a great idea to notify your employees in writing as soon as possible so that you and they together can manage paid leave requests throughout the year, so that your employees have a sufficient balance for the shutdown period.
In the meantime, this is an opportunity to review procedures and guidelines in your business about annual shutdowns and taking annual leave in advance of accrual, and check that they comply with the changes for employees employed under impacted awards. You should also review and update your payroll systems to ensure that employees’ annual leave entitlements are being properly accrued and accounted for, and that employees can access leave in advance.
Need more support?
At PPS, we can help you understand what these changes mean for your business, and work with you to put them into practice. Our team of experts has extensive knowledge of Modern Awards and the Fair Work Act and can assist you in ensuring that your workplace is compliant with the new requirements if they are applicable to you. Remember, #wevegotyourback.