The festive period can present a range of specific HR issues relating to business shut down, public holidays and pay rates.
Can you direct employees to take leave?
Firstly, confirm whether your employees are covered by an Award or an Enterprise Agreement. If they are covered, then comply with any requirements. For example, an Award may require the employer to give a period of notice to their employees of their intention to shut down, and to consult with their employees about that intention.
If the Award or Enterprise Agreement is silent, an employer cannot direct an employee to take annual leave unless (a) the employee agrees to it, or (b) it is covered by their contract of employment.
Awards and Enterprise Agreements often contain an ‘excess leave’ provision that an employer may be able to activate in support of shut down, but such provisions are often restrictive in how much leave the employer can direct an employee to take.
In a non-Award situation, the employer can only direct an employee to take annual leave if it is deemed ‘reasonable’ in the particular situation, which will vary according to the circumstances of the business & the employee. The safest path is to ensure that your employees either (a) agree to take annual leave during shut down, or (b) the direction is covered by their contract of employment.
What if your employee hasn’t accrued enough leave?
Where your employees are covered by an Award or an Enterprise Agreement, check for provisions that set out what happens if an employee has accrued insufficient leave. Some Awards will contain a specific clause which allows the employee to take leave without pay to cover a period of shut down – whilst others may be silent.
Where an Award or Enterprise Agreement is silent, then check if this question is covered by the employment contract. If it isn’t addressed, best practice is to negotiate with the employee to take leave without pay. But beware – employers cannot force employees to take leave without pay where the Award and/or contract of employment are silent.
When can you direct employees to work?
Under s114 of the Fair Work Act an employer may request an employee to work on a Public Holiday if the request is deemed ‘reasonable’. Conversely, an employee can refuse if the request is not reasonable or where the refusal is reasonable.
A ‘reasonable’ request or refusal would take in to account factors such as:
- The nature of the employers workplace;
- Type of employment (FT, PT, casual) and the nature of the work;
- The employees personal circumstances;
- The amount of notice in advance given;
- Entitlement to receive overtime etc that reflects expectation of work on PH
What do you have to pay your employees on Public Holidays?
If employee works on a Public Holiday the employer should pay penalty rates that comply with the requirements in the Award or Enterprise Agreement. If the Award or EA is silent, check for requirements laid down in the employees’ employment contract.
If the employee doesn’t work on a Public Holiday, Section 116 of the Fair Work Act requires that the employer pays at the employee’s base rate of pay – excludes loadings, allowances, penalty rates etc. If the employee is not rostered to work they are not entitled to payment.
If a Public Holiday clashes with period of annual leave the employer cannot deduct the Public Holiday from the employees annual leave balance.
Substituting Public Holidays
Employers and employees may agree to substitute a day or part-day Public Holiday for another day. Since October 2019 most Awards have removed the employer’s ability to unilaterally substitute a Public Holiday or substitute a Public Holiday with agreement of the majority of staff, and replaced it with the ability for employers and individual employees to agree to substitute a Public Holiday.
From all here at Ezra Legal we wish you a safe and merry Festive Season.