On 22 December 2022, the Fair Work Commission (FWC) issued the 4 yearly review of modern awards—Plain language—Shutdown provisions [2022] FWCFB 246 (Determination) to vary clauses about temporary shutdown periods in 78 modern awards.
On 1 May 2023, new clauses were inserted into those awards to reflect the FWC’s Determination. As a result, the upcoming Christmas period is likely the first time many businesses will shutdown under the new provisions. To avoid breaching the relevant award (and therefore breaching the Fair Work Act 2009), it is critical that employers covered by these awards understand their new obligations.
Most employers are required to give all impacted employees at least 28 days’ written notice of the shutdown. A number of awards require 1 month’s notice, while some awards require 2 or 3 months’ notice. The impacted awards and applicable notice periods are detailed at the end of this article.
If your business is planning to shutdown for Christmas, the 28 days’ notice must be given by 27 November 2023. It is unfortunately too late for employers to whom the 1, 2 or 3 month notice period applies. A shorter notice period can be agreed between an employer and the majority of its employees.
If an employee is engaged after notice is given, the employer must give that employee written notice as soon as reasonably practicable.
Under the new rules, employers can direct employees to take paid annual leave during a temporary shutdown if the employee has accrued a sufficient entitlement. The direction must be in writing and must be reasonable. If an employee does not have sufficient annual leave accrued to cover the shutdown, the employee can agree – in writing – to:
- take leave without pay during all or part of the temporary shutdown period. or
- take leave in advance (i.e. before the leave has accrued, resulting in a negative balance).
There is no ability to direct employees to take unpaid leave or leave in advance; their agreement (in writing) is required.
If the employee does not have sufficient annual leave and does not agree to take leave without pay or annual leave in advance, the employer may allow the employee to work during the shutdown period. If this is not possible, the 78 awards essentially require employers to continue to pay the employee their usual wage during the shutdown.
While directing an employee with insufficient leave to take unpaid leave seems reasonably common-sense, the FWC stated in an August 2022 decision that “in the absence of any award entitlement to leave without pay (or even any entitlement to request such leave), we do not consider that there is power under the FW Act to include in an award a provision by which the employer may require an employee to take leave without pay during a shutdown period where the employee does not have sufficient annual leave entitlements to cover the period.”
We recommend employers seek agreement as soon as possible from employees to take unpaid leave if they not have sufficient annual leave accrued to cover the shutdown period.
The new shutdown rules will affect employers and employees covered by the following awards:
28 days’ notice required
- Aboriginal and Torres Strait Islander Health Workers and Practitioners and Aboriginal Community Controlled Health Services Award
- Aircraft Cabin Crew Award
- Airline Operations–Ground Staff Award
- Alpine Resorts Award
- Aluminium Industry Award
- Animal Care and Veterinary Services Award
- Banking, Finance and Insurance Award
- Broadcasting, Recorded Entertainment and Cinemas Award
- Business Equipment Award
- Cemetery Industry Award
- Clerks—Private Sector Award
- Coal Export Terminals Award
- Commercial Sales Award
- Educational Services (Post-Secondary Education) Award
- Electrical Power Industry Award
- Electrical, Electronic and Communications Contracting Award
- Food, Beverage and Tobacco Manufacturing Award
- General Retail Industry Award
- Graphic Arts, Printing and Publishing Award
- Hair and Beauty Industry Award
- Health Professionals and Support Services Award
- Higher Education Industry—General Staff—Award
- Hospitality Industry (General) Award
- Hydrocarbons Industry (Upstream) Award
- Journalists Published Media Award
- Legal Services Award
- Local Government Industry Award
- Manufacturing and Associated Industries and Occupations Award
- Mining Industry Award
- Mobile Crane Hiring Award
- Nursery Award
- Nurses Award
- Oil Refining and Manufacturing Award
- Pharmaceutical Industry Award
- Professional Employees Award
- Real Estate Industry Award
- Registered and Licensed Clubs Award
- Restaurant Industry Award
- Salt Industry Award
- Seafood Processing Award
- Security Services Industry Award
- Sugar Industry Award
- Supported Employment Services Award
- Timber Industry Award
- Vehicle Repair, Services and Retail Award
- Water Industry Award
- Wine Industry Award
- Wool Storage, Sampling and Testing Award.
1 month’s notice required
- Ambulance and Patient Transport Industry Award
- Aquaculture Industry Award
- Asphalt Industry Award
- Car Parking Award
- Cement, Lime and Quarrying Award
- Cleaning Services Award
- Concrete Products Award
- Contract Call Centres Award Fitness Industry Award
- Fitness Industry Award
- Gardening and Landscaping Services Award
- Gas Industry Award
- Horse and Greyhound Training Award
- Miscellaneous Award
- Pest Control Industry Award
- Poultry Processing Award
- Premixed Concrete Award
- Racing Clubs Events Award
- Racing Industry Ground Maintenance Award
- Road Transport and Distribution Award
- Road Transport (Long Distance Operations) Award
- Silviculture Award
- Storage Services and Wholesale Award
- Surveying Award
- Telecommunications Services Award
2 months’ notice required
- Building and Construction General On-site Award
- Joinery and Building Trades Award
- Plumbing and Fire Sprinklers Award
3 months’ notice required
- Meat Industry Award
- Textile, Clothing, Footwear and Associated Industries Award
If you would like more information about the new shutdown rules in awards and the legal implications for your business, please contact our Employment and Workplace Relations team via email at [email protected] or call us on 8414 3400.