Sometimes, you as an employer may find yourself needing to ask your employees to use their annual leave. This can be during a shutdown of the business when an employee has accumulated excess leave or as part of an agreement an employee has with an employer.

Shut down

A shutdown is when the business closes temporarily during slow times of the year. This is often over Christmas and New Year when many other businesses shut down and their customers go on holiday. Other types of shutdown situations depend on the agreement you have with your employees or whether an applicable award provides for such situations.

For example, Bob works in construction and is covered by the Building and Construction General Onsite Award 2010. Under the award, Bob can be directed by his employer to take annual leave when the company shuts down over Christmas and New Year. Bob’s employer needs to give him at least two months notice before he needs to take his leave. This is if the purpose of the shutdown is to give all of the employees of the company their accumulated annual leave. If Bob does not have enough leave entitlements to cover the period of the shutdown, he will have to take unpaid leave.

Jenny, however, works in health services and is covered by the Health Professionals and Support Services Award 2010. Jenny cannot be directed to take annual leave during a shutdown, as she does not work in a dental or medical practice. She can choose to take annual leave, leave in advance or unpaid leave during a shutdown, but if she doesn’t agree, she has to be paid her ordinary pay rate for the shutdown. She cannot be forced to take unpaid leave.

Excess leave

You might be able to ask your employees to take paid annual leave if they have excess leave, under some awards and registered agreements. If your employee is covered by an agreement, then it can set out specific rules as to when they can be asked to take leave. If there are no direct clauses about excess leave, then you can only ask your employee to take the leave under reasonable circumstances.

Getting back to Bob and Jenny, neither of them can be directed to take excess annual leave by their employers under their respective awards. John, however, is covered by the Horticulture Award 2010 with his employment. He can be directed to take annual leave when:

  • he has accumulated more than eight weeks of leave,
  • he has not reached an agreement with his employer as to when he will take the leave, and
  • is given at least 28 days notice before leave needs to be taken.

His employer can only ask him to take no more than a quarter of his accumulated leave.

Registered Agreements

Under some registered agreements, an employer can ask an employee to take leave under various circumstances. This document has to be approved and registered with the Fair Work Commission. Agreements like this include enterprise agreements, collective agreements and greenfields agreements.

For example, Peter has an enterprise agreement with his employer, a commercial electrical company. His employer might be able to ask him to take leave when the business is slow, and they have not had any new contracts coming in over winter.


Contact LegalVision today if you require any help understanding when you can ask your employees to take leave and your responsibilities in complying with any relevant awards or agreements.

Bianca Reynolds
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