Business Info, Business Updates

Christmas Time Shut-Down, Annual Leave and Public Holidays

By Paolo Coniglio, 13.12.2020

Christmas Time for Small Busineses

In Australia, the Christmas period often provides the perfect opportunity for businesses to stop trading for the holidays. Employers who wish to shut-down for Christmas, need to be aware of the regulations involved in directing employees to take Annual Leave, paying and calculating employees’ entitlements and Public Holidays. 

For other businesses, the Christmas Period represents their peak time (such as Tourism, Retail and Hospitality). This often requires these businesses to trade during the Holiday period and also on the Public Holidays. These Employers need to be mindful when requesting their employees to work during the Public Holidays and ensure they pay the correct penalty rates.

This blog has been designed to help small businesses managing the Christmas Period, whether they decide to shut-down or continue to trade.

Directing Employees to Take Annual Leave

The right to direct employees to take Annual Leave depends on the conditions stipulated on the employees’ classified Award or Employment Agreement.

If employees are paid under an Award, Fairwork provides a dedicated page which outlines the rules and regulations about directing employees to take Annual Leave for their Award.

If employees are paid under an Employment Agreement, the direction to take Annual Leave should be included as a clause within such agreement. If not, employers will need to come to an arrangement with their employees.

Deducting the Correct Amount of Annual Leave

The next challenge is to deduct the correct amount of Annual Leave. Businesses must pay the correct number of hours of leave accrued and decide whether or not to direct those employees who do not have enough hours accrued, to take Unpaid Leave.

Finally, Public Holidays must be excluded from the leave calculation. This can be tricky, especially with Part-Time employees.

Paying Annual Leave in Advance

Some employers may also want to pay Annual Leave in advance for the entire shut-down period, so they don’t have to worry about processing pays over the holidays.

There are no implications in the Profit & Loss or Single Touch Payroll for employers to pay leave in advance.

However, paying leave in advance may affect their cash flow management reporting over the December and January months. This could be particularly important for those businesses who can set their Financial Year to Jan-Dec.

Public Holidays over the Christmas Period

The following Public Holidays fall during the Christmas period:

Full Days (National)

  • 25th December (Christmas Day)
  • 26th December (Boxing Day)
  • 1st January (New Year’s Day)

Part Days (by State)

  • 24th December – from 6 PM to Midnight (QLD Christmas Eve)
  • 24th December from 7 PM to Midnight (NT & SA Christmas Eve)
  • 31st December from 7 PM to Midnight (ACT, NT & SA New Year’s Eve)

Paying for Public Holidays

Businesses that close during the Christmas period are required to pay their employees for Public Holidays at the base rate for the employee’s ordinary hours of work. This rate must include any loadings, allowances and other penalty rates normally paid during a standard workday:

  • Full-Time employees > Must be paid all Public Holidays;
  • Part-Time employees > Must be paid the Public Holidays that fall within the days they are usually rostered to work;
  • Casual employees > are not entitled to be paid Public Holidays.

Working During Public Holidays

Businesses that stay open during the Christmas period can request employees to work over the Public Holidays, providing their request is reasonable. Employees can refuse to work on such days (providing their refusal is also reasonable).

Generally, employees are entitled to penalty rates for hours worked during Public Holiday. The penalty rates are determined by their classified Award or Employment Agreement and may change between regular employees and shift-workers.

Some Awards and Employment Agreements may also provide additional entitlements, such as an extra RDO, or the ability for employees to substitute the Public Holiday for a different day.

Employers should refer to their Awards or Employment Agreements to gain a better understanding of their employees’ rights and pay rates related to Public Holidays.

Public Holidays falling during a weekend

Public Holidays which fall on a weekend may be substituted by another day. Alternatively, a second day may be added as a Public Holiday. This is determined by the Public Holiday Act of the relevant State or Territory.

This means depending on the individual State or Territory, if the Public Holiday weekend provision is to add another day, employees working over the Holiday period will need to be paid Public Holiday rates for the weekend day and the working day set as the Public Holiday.

If the Public Holiday weekend provision is to substitute with another day, employees working over the holiday period will need to be paid standard weekend rates for the Public Holiday falling on a Saturday or Sunday and Public Holiday rates for the days set to substitute the Public Holiday.

Table 1 – Christmas Day over weekends by State

Public Holidays - Christmas Day

 Table 2 – Boxing Day over weekends by State

Public Holidays - Boxing Day

  Table 3 – New Year’s Day over weekends by State

Public Holidays - New Year's Day

Resources

We have created a number of resources to help you manage your employees’ Annual Leave during the Christmas shut-down period. In this section, you will also find other links to help you better understand Annual Leave Direction and Public Holidays.

User Guides

Payroll – Managing Leave over a Shut-Down Period – MYOB

References

Fair Work – Directing Employees to take Annual Leave

Fair Work – Shutting Down over Christmas and New Year

Fair Work – Federal Public Holidays

Fair Work – List of Public Holidays

ACT – Holidays Act 1958

NSW – Public Holidays Act 2010

QLD – Holiday Act 1983

NT – Public Holidays Act 1981

SA – Holidays Act 1910

TAS – Statutory Holidays Act 2000

VIC – Public Holidays Act 1993

Disclaimer

This blog and attached resources are of general nature designed for informational and educational purposes only. They should not be construed as professional financial advice for your individual business. Should you need such advice, consult a licensed financial or tax advisor.

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