Are you shutting down over the Christmas / New Year period? If so, now’s the time to start preparing and checking the rules for employee entitlements over the Christmas break.

Below is information and links from Fair Work Ombudsman explaining the rules as well as what to do if you’re on the JobKeeper scheme.

Directing employees to take leave

Employers can direct their employees to take annual leave or unpaid leave during a shut down only if their award or registered agreement allows it.

Most awards have rules about how and when employers can do this. For example, an employer covered by the Retail Award needs to give their employees 4 weeks’ notice to take annual leave.

If there aren’t any rules in the award or agreement, employees can agree with their employer to take annual leave (including before accruing it) or unpaid leave during a shut down. However, employees can’t be forced to take unpaid leave.

If an agreement can’t be reached about taking annual leave or unpaid leave, employees need to be paid their normal pay while the business has shut down.

Find out if your award has rules for directing an employee to take leave over Christmas and New Year on the Direction to take annual leave during a shut down page.

Not sure which award applies? Use the Find my award tool.

If you’re covered by a registered agreement, you can find it on the Fair Work Commission website – Find an agreement .

Employees without enough annual leave

Most awards allow an employee without enough annual leave to make an agreement with their employer to take leave before it’s accrued. Registered agreements may have different rules.

If an employer agrees, employees can also take unpaid leave.

Check what your award says on the Direction to take annual leave during a shut down page.

Paying employees who don’t work on a public holiday

When a public holiday falls on an employee’s usual workday, employers need to pay them their minimum pay rate for their usual hours. The minimum pay rate doesn’t include any loadings, overtime or penalty rates that they usually get for working that day.

Some employees get extra entitlements when a public holiday falls on their rostered day off. You can check the rules for your award on the Not working on public holidays page.

Public holidays during annual leave

If a public holiday falls during an employee’s annual leave, employers need to pay them for the public holiday. This means employees get their minimum pay rate for the day and it doesn’t come out of their annual leave balance.

See Not working on public holidays for more information.

Working extra hours and working on public holidays

Employers can ask their employees to work extra hours or work on public holidays if the request is reasonable. Whether these extra hours are reasonable depends on several things, including:

the needs of the business
the employee’s personal commitments, like family or caring arrangements
how much notice the employee gets about the extra hours
what the employee’s contract says.

If an employee works extra hours or on a public holiday, their award or registered agreement may give them additional entitlements such as:

penalty rates
a different day off
extra annual leave.

See When overtime applies for more information.

JobKeeper and the holiday period

1. JobKeeper payments during Christmas and New Year

Employers in the JobKeeper scheme need to follow certain rules in relation to pay for their eligible employees.

Employers receiving JobKeeper payments for an employee need to pay them the higher of the following amounts each fortnight:

the amount of the applicable JobKeeper payment, or
their usual pay for work performed (including any paid leave or public holiday pay).

This is known as the ‘minimum payment guarantee’ under the JobKeeper provisions. This means that employees who take annual leave during this period need to be paid the higher of the applicable JobKeeper payment or the amount they’re entitled to while they’re on leave.

Find out more on the Pay and the JobKeeper scheme page.

Employees on unpaid leave during the holiday period (for example, because they don’t have annual leave) still get their JobKeeper payments while they’re on leave.

More information:

2. Directing employees on JobKeeper to take leave

The rules about taking, requesting and directing annual leave still apply to all employers and employees in the JobKeeper scheme.

Under the original JobKeeper provisions, qualifying employers could make agreements with eligible employees to take annual leave. These provisions have stopped applying from 28 September 2020 and employers can no longer make these agreements with their employees.

More information:

3. Directing an employee on a JobKeeper enabling stand down to take annual leave

An employee can agree with their employer to take paid leave instead of reducing their hours under a JobKeeper enabling stand down.

While an employee of a qualifying employer is on paid leave, they need to be paid:

an amount equal to the applicable JobKeeper payment, or
their usual pay during their leave if it’s more than the applicable JobKeeper amount.

More information:

4. JobKeeper payments on public holidays during a JobKeeper enabling stand down

Employers who have employees on a JobKeeper enabling stand down during the Christmas and New Year Period, still need to include public holiday pay when calculating an employee’s usual pay. This is only if the employee:

would normally have worked on the public holiday as if the JobKeeper enabling stand down direction hadn’t been given, or
would have been entitled to time off without loss of pay.

More information:

Further help:

If you need assistance with payroll or clarification on matters raised in this article, feel free to contact Marsh & Partners Bookkeeping team. You can reach us on (07) 3023 4800 or at mail@marshpartners.com.au.

You can find out more about working with Marsh & Partners here. As your Absolute.Account.Ability partner we’re on a mission to make your business life better. We’ll help you set goals for your business, devise an Action Plan to make them happen and meet with you regularly to ensure you stay on track.

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