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Does your business close down over the Christmas period?  Would you like employees to take part of their annual holidays over the shut-down periods?  Then you need to know your obligations under the law.


If your staff are employed under New South Wales awards system, the NSW Annual Holidays Act 1944 if relevant to your business operations.  This Act requires you to provide one month’s notice of the “specified period” (ie the period you intend to close) to your employees.

If you employ new staff before Christmas, and they will be employed for less than a month before the closedown, you must notify them of the upcoming closure period on their first day of work.

This year, the public holidays in NSW are on Monday and Tuesday December 25 and 26, the New Year Holiday is Monday January 1, and Australia Day holiday is Friday January 26, 2007.  Everyone is paid their ordinary pay for these public holidays with the remaining days to be taken as annual leave.

If new employees are not yet entitled to holidays for the whole of the closedown, they must use the annual leave they do have, and take the balance of days as leave-without-pay.  The employer is required to pay one-twelfth of a staff member’s salary for these leave-without-pay days, and to take into account that the staff member’s annual leave will start accruing again from the start of the closedown period.

An employee who is not yet entitled to any holidays can, if you both agree, take annual leave in advance of their entitlement.

As always, notice of the arrangements should be provided in a timely manner and in a format that is clear and easy to understand.


If you employ staff under a “company” structure, the NSW laws are now overridden by the federal Workchoices standards.

Under these new conditions, you may direct employees to take annual paid leave for a particular period when the business is shut down, but only if the employee has already accrued at least enough annual leave for the proposed shut down period.

If the employee does not have sufficient annual leave to cover the whole period of closure, they must be paid at their normal rate for the additional days not covered by leave entitlements.  This does not count as annual leave retrospectively.  The days need to be treated as if it is “work as usual”.

Under Workchoices, there is no particular period of notice required to let staff know about forthcoming closure arrangements.

As always, as a business owner, it is wise to be fully informed about legal considerations pertaining to any planned actions, even over the Christmas period!  For advice on Workchoices or any other business issue you may be facing, please give us a call on 8296 6222 or pop in to meet with us.

This article has been prepared by:
Townsends Business and Corporate Lawyers
Level 9, 65 York Street,
Tel: (02) 8296 6222
Fax: (02) 8296 6200

This article is not a substitute for independent professional advice. We do not warrant the accuracy, completeness or adequacy of the information or material in this article. All information is subject to change without notice. We and each party providing material displayed in this article disclaim liability to all persons or organisations in relation to any action(s) taken on the basis of currency or accuracy of the information or material, or any loss or damage suffered in connection with that information or material. You should make your own enquiries before entering into any transaction on the basis of the information or material in this article. Please ensure you contact us to discuss your particular circumstances and how the information provided applies to your situation.


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