On 22 December 2022, the Fair Work Commission handed down a decision relating to the shutdown provisions in a number of modern Awards. This decision, which will come into effect on 1 May 2023, will affect 78 modern Awards, including core Industry Awards of MTA members such as the Vehicle Repair Services and Retail Award 2020, Road Transport and Distribution Award 2020 and Clerks Private Sector Award 2020.
Currently clause 29.6 (annual close down) of the Vehicle Repair, Services and Retail Award 2020 enables businesses to temporarily shut over the holiday period by providing at least 4 weeks’ notice and allowing annual leave to employees. Currently, where employees do not have sufficient accrued annual leave to cover the period, any remaining time will be leave without pay (unpaid leave).
Under the new shutdown provisions, employers are still able to shut down the workplace with 28 days’ notice and direct employees to take a period of paid annual leave for which the employee has accrued an entitlement. However, there is no longer the section relating to unpaid leave, meaning that an employer can no longer expect or require an employee to take unpaid leave for the period of the shutdown.
Employees can still request to take a period of unpaid leave over the annual shut down but this cannot be enforced. There is an option for annual leave to be taken in advance by written agreement set out in clause 29.7 (annual leave in advance) which, if the employment comes to an end, will allow an employer to deduct any outstanding amount of leave paid in advance that was provided during the shutdown.
As the year progresses, members are advised to monitor annual leave accruals of employees to ensure they have enough leave to cover them for the annual shut down. There is potential to deny annual leave throughout the year if it will impact on the employee having enough accrual to cover the shutdown. Where an employee requests annual leave throughout the year, knowing it will not leave them with enough to cover the annual shut down, an option may be to have a written agreement where the employee agrees to request unpaid leave for the required portion of the annual shutdown.
MTA Members can get FREE access to agreement templates relating to the above by contacting our Workplace Relations team, either via email: wr@mtasant.com.au or phone 8291 2000.