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ARTICLE · 19 APRIL 2023

Changes to shutdown leave rules for 78 modern awards

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Where employees don't have enough annual leave to cover a shutdown period, they cannot be directed to take unpaid leave.

AustraliaEmployment and HR
Michael Byrnes
Michael Byrnes
Alexander Leong
Alexander Leong
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The Fair Work Commission ('FWC') is required to conduct a review of the modern award process every 4 years under section 156A of the Fair Work Act 2009 (Cth) ('FWA'). This time around, it will be amending 78 different modern awards to include a new 'model term'. This 'model term' is intended to replace the existing shutdown clauses in these awards which relate to an employer's ability to direct its employees to take annual leave when it shuts down all or part of its operations. The most common example would be employers shutting down for the Christmas/New Year holidays every year. Ordinarily, there would be no issues if every employee has accrued sufficient annual leave leading up to this period. However, things get a little more complicated when employers find themselves in situations where an employee does not have enough annual leave accrued to cover the employer's shutdown period. Note, these changes will take effect on 1 May 2023.

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Michael Byrnes, Partner
Phone: + 61 2 9233 5544
Email: [email protected]

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