Can your employer make you take annual leave over Christmas?

A Christmas shutdown can use up your annual leave, within limits. What awards, agreements and award-free rules allow, the notice you should get and what happens if you don't have enough leave.

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Your employer can make you take annual leave during a Christmas shutdown only if your award or enterprise agreement allows it, or, if neither covers you, the requirement is reasonable. Awards that allow it set rules on notice and on how much leave can be used. Under the Clerks award, for example, a shutdown direction can only use leave you have already built up.

When can an employer direct you to take annual leave?

Only in some situations. The Fair Work Ombudsman gives two examples: the business closes over the Christmas and New Year period, or an employee has built up excess annual leave. The rules on when this can happen sit in awards and registered agreements.

A shutdown is when a business temporarily closes, such as over Christmas and New Year. It is different from a stand down, which is when an employer tells staff not to work because they can't be usefully employed for reasons outside the employer's control, such as an equipment breakdown it isn't responsible for.

What if you are award and agreement free?

Many corporate employees are not covered by an award or enterprise agreement. For them, the Fair Work Ombudsman says an employer can require employees to take paid annual leave if the requirement is reasonable. That includes a temporary shutdown between Christmas and New Year.

There is no set notice period or day count in that rule. Whether it is reasonable depends on the circumstances.

What does an award usually require?

Each award has its own clause, so check yours. The Clerks Private Sector Award, which covers many office roles, is a useful example. Under clause 32.5 of that award, an employer that wants staff to take paid annual leave during a shutdown must:

  • give affected employees 28 days' written notice of the shutdown, or a shorter period if the majority of employees agree
  • give written notice as soon as reasonably practicable to anyone hired after that notice went out
  • make any direction in writing, and make it reasonable.

The direction can only cover paid annual leave you have built up. For any part of the shutdown not covered by that leave, you and your employer may agree in writing for you to take leave without pay. You can also take annual leave in advance during the shutdown if you agree to it under the award's leave in advance clause.

What if you're covered by an enterprise agreement?

Check the agreement's terms on shutdowns. Agreements can set their own rules about when an employer can direct leave during a shutdown. The Fair Work Commission has a search tool for registered agreements.

What if you've just started and don't have enough leave?

Under an award clause like the Clerks example, your employer can only direct you to use leave you have built up. Unpaid leave or leave in advance for the rest of the shutdown is something you agree to, in writing. If you are award free, the test is whether the requirement is reasonable, and a requirement that pushes a three-week employee deep into a negative balance is the kind of situation worth asking about.

Annual leave starts building up from your first day, including during probation. Our guide to how annual leave works in Australia covers accrual, loading and payouts.

What did TAC readers tell us?

We asked our community about compulsory Christmas shutdowns.

Most said their shutdown uses somewhere between a few days and two weeks of annual leave. Many asked whether making staff use their leave this way is legal at all.

Same across so many major corporates! Hate it! Give us the extra two weeks and the flexibility to use 4 anywhere I choose across the year

Yep. At least 7 days annual leave for shutdown. I started end of November 2023 and had to take shutdown off putting me into a negative leave balance within three weeks of joining. No exceptions.

I lose 8 days.....hate the rhetoric where they frame it as something that benefits employees

Some companies now gift additional leave for shutdown periods. My last employer gave an extra 5 days which was well received.

Have a 2 week shut-down however we only take 50% of the days required. The company supports the difference.

Mandotory shutdown is a reasonable process for business' to manage their costs during drop in revenue and AL allowances

What can you do before the shutdown?

  • Find out what covers you: an award, an enterprise agreement or neither. Your payslip or contract usually says.
  • Check the notice you were given and whether it was in writing.
  • If your leave balance won't cover the shutdown, ask in writing what happens to the gap before agreeing to unpaid leave or leave in advance.
  • If something looks wrong, the Fair Work Ombudsman's Infoline is 13 13 94.

This is general information, not legal advice. Your award, agreement or contract may give you different rights.

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