Temporary Shut Down Period: Understanding Your Obligations as an Employer

What Constitutes a Temporary Closure Period in Australian Employment Legislation?

A temporary closure period refers to a duration during which an employer temporarily ceases business operations or suspends a part of their activities, typically due to factors such as reduced business activity or necessary maintenance work. Throughout this period, employees may not be obligated to report to work and may either remain unpaid or be required to utilise their accrued annual leave or other paid leave entitlements to cover the closure period.

Are Employers Permitted to Temporarily Close Their Business in Australia?

Indeed, employers in Australia possess the authority to temporarily close their businesses, provided they adhere to relevant employment statutes and regulations. It is imperative for employers to furnish employees with prior notice of the impending closure period and adhere to the stipulations outlined in the Fair Work Act and any applicable modern awards or enterprise agreements.

Can Employers Mandate Annual Leave During a Temporary Closure Period?

Certainly, employers hold the prerogative to mandate that employees utilise their annual leave or other paid leave entitlements during a temporary closure period. This action is justified as employees are not deemed to be on stand down but are instead availing paid leave in accordance with the employer’s directives. However, it is imperative for employers to comply with the pertinent provisions delineated in the Fair Work Act and any applicable modern awards or enterprise agreements when enforcing leave requirements.

Is Redundancy a Possibility During a Temporary Closure Period?

Certainly, employees may face redundancy during a temporary closure period, contingent upon the employer’s ability to substantiate the authenticity of the redundancy and its alignment with the requisites delineated in the Fair Work Act. Nevertheless, employers must remain compliant with their obligations stipulated in any applicable modern awards or enterprise agreements, which encompasses furnishing affected employees with requisite notice and redundancy compensation.

How Can Employers Effectively Navigate a Temporary Closure Period?

Employers can efficiently navigate a temporary closure period by engaging in meticulous planning and fostering transparent and timely communication with employees. It is imperative for employers to furnish employees with prior notice regarding the impending closure period, elucidating its anticipated duration and any associated leave or entitlement requisites. Moreover, employers should actively engage in consultation with employees and their representatives, where applicable, to address any concerns or inquiries and ensure the equitable management of the closure period in adherence to employment legislation.

What Recourse Exists if an Employee Lacks Sufficient Accrued Annual Leave During the Closure Period?

In instances where an employee does not possess adequate accrued annual leave at the onset of the closure period, an employer may solicit the employee’s agreement to utilise annual leave in advance. Alternatively, the employee may opt to take unpaid leave for the duration of the closure period.

How HR Connect can help

If you require assistance with dealing with disciplinary issues concerning staff, HR Connect can help. Our HR Advisors will be able to guide you through each step of the disciplinary process and we have template documents (e.g. direction to attend a disciplinary meeting, written warning, letter of termination, etc) available as part of our subscription packages.

 

 

About HR Connect

HR Connect is one of Australia’s leading providers of HR & workplace safety advice services, designed to help small business owners make confident and compliant business decisions.

 

Disclaimer

The information provided in these knowledge base articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact HR Connect for advice. The information in this summary is correct as of August 2021.

 

This knowledge base article will change over time, as Modern Award legislation relating to this Industry or Occupation is passed by the Fair Work Commission. Originally published on 21 September 2021 and last updated on 18 February 2022.

Subscribe to our Newsletter

Free up your time to focus on more important stuff

 

Know you’re meeting your obligations as a small business owner and make confident and compliant business decisions with HR and workplace safety advice, and legal support for small businesses.
All for $250 a month.


4.9 Google Rating. Based on 191 reviews.

Exclusive National Approved HR Products for ICB Members
#1 HR Provider for Employment Hero customers

AHRI Organisational Member

Free up your time to focus on more important stuff

 

Know you’re meeting your obligations as a small business owner and make confident and compliant business decisions with HR and workplace safety advice, and legal support for small businesses.
All for $250 a month.

Exclusive National Approved HR Products for ICB Members

#1 HR Provider for Employment Hero customers
AHRI Organisational Member


4.9 Google Rating. Based on 191 reviews.