Around this time each year, questions emerge regarding the Christmas and New Year period, such as ‘what are employee entitlements when working through the holiday period?’ In this article, we will examine how to direct employees to take leave, how annual leave works, public holidays and JobKeeper through the holiday period.
Directing employees to take leave
Employers can direct their employees to take annual leave or unpaid leave during a shutdown only if their award or registered agreement allows it.
Most awards have rules about how and when employers can do this. For example, an employer covered by the Retail Award needs to give their employees 4 weeks’ notice to take annual leave.
If there are not any rules in the award or agreement, employees can agree with their employer to take annual leave (including before accruing it) or unpaid leave during a shutdown. However, employees cannot be forced to take unpaid leave.
If an agreement cannot be reached about taking annual leave or unpaid leave, employees need to be paid their normal pay while the business has shut down.
Employees without enough annual leave
Most awards allow an employee without enough annual leave to make an agreement with their employer to take leave before it has accrued. Registered agreements may have different rules.
If an employer agrees, employees can also take unpaid leave.
Paying employees who do not work on a public holiday
When a public holiday falls on an employee’s usual workday, employers need to pay them their minimum pay rate for their usual hours. The minimum pay rate does not include any loadings, overtime or penalty rates that they usually get for working that day.
Some employees get extra entitlements when a public holiday falls on their rostered day off.
Public holidays during annual leave
If a public holiday falls during an employee’s annual leave, employers need to pay them for the public holiday. This means employees get their minimum pay rate for the day and it does not come out of their annual leave balance.
Working extra hours and working on public holidays
Employers can ask their employees to work extra hours or work on public holidays if the request is reasonable. Whether these extra hours are reasonable depends on several things, including:
- the needs of the business
- the employee’s personal commitments, like family or caring arrangements
- how much notice the employee gets about the extra hours
- what the employee’s contract says.
If an employee works extra hours or on a public holiday, their award or registered agreement may give them additional entitlements such as:
- penalty rates
- a different day off
- extra annual leave.
JobKeeper payments during Christmas and New Year
Employers in the JobKeeper scheme need to follow certain rules in relation to pay for their eligible employees.
Employers receiving JobKeeper payments for an employee need to pay them the higher of the following amounts each fortnight:
- the amount of the applicable JobKeeper payment, or
- their usual pay for work performed (including any paid leave or public holiday pay).
This is known as the ‘minimum payment guarantee’ under the JobKeeper provisions. This means that employees who take annual leave during this period need to be paid the higher of the applicable JobKeeper payment or the amount they are entitled to while they are on leave.
Employees on unpaid leave during the holiday period (for example, because they don’t have annual leave) still get their JobKeeper payments while they are on leave.
Directing employees on JobKeeper to take leave
The rules about taking, requesting and directing annual leave still apply to all employers and employees in the JobKeeper scheme.
Under the original JobKeeper provisions, qualifying employers could make agreements with eligible employees to take annual leave. These provisions have stopped applying from 28 September 2020 and employers can no longer make these agreements with their employees.
Directing an employee on a JobKeeper enabling stand down to take annual leave
An employee can agree with their employer to take paid leave instead of reducing their hours under a JobKeeper enabling stand down.
While an employee of a qualifying employer is on paid leave, they need to be paid:
- an amount equal to the applicable JobKeeper payment, or
- their usual pay during their leave if it is more than the applicable JobKeeper amount.
JobKeeper payments on public holidays during a JobKeeper enabling stand down
Employers who have employees on a JobKeeper enabling stand down during the Christmas and New Year Period, still need to include public holiday pay when calculating an employee’s usual pay. This is only if the employee:
- would normally have worked on the public holiday as if the JobKeeper enabling stand down direction had not been given, or
- would have been entitled to time off without loss of pay.
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