Are you intending to shut down your business over the Christmas and New Year period? It’s never too early (or too late) to start planning, says Employsure Senior Employment Relations Adviser Ashlea Maley
Businesses planning to close down across the festive season need to check the conditions relating to their rights to enforce an annual closedown and notify staff in accordance with the Holidays Act 2003.”
Employers can only have one closedown per year, any more and they need their employee’s consent. During a closedown an employer can require employees to take annual leave, even where this requires employees to take time off for which they are not fully reimbursed. The employer is required to provide employees with at least 14 days’ advance notice of the closedown.
Employees who have been employed for less than 12 months at the date of closedown will not have worked long enough to be entitled to annual holidays. In this situation the employer must pay the employee 8% of gross earnings since their start of employment less any payment for annual holidays taken in advance. The employee’s anniversary date for annual holidays entitlement must move to the date of the start of the closedown (or another date close to the start of the closedown) and they will not be entitled to any annual holidays for another 12 months.
In addition to the payment of the 8%, the employer and employee may agree to the employee taking paid annual holidays in advance of their entitlement (these holidays will be deducted from the next year’s entitlement). If the employer is happy to allow this, they should take care to protect themselves from bearing the cost of this should the employee leave before they have accumulated sufficient leave to repay the deficit.
For all employees whose work is subject to a regular annual closedown, to make things more convenient, the employer can nominate a date that will be treated as the date that the closedown begins, and on which the employees become entitled to annual holidays. This date must be reasonably connected to the timing of the regular annual closedown.
For example, where there is a Christmas closedown, the date could be set at 15 December to ensure that it always comes before the annual closedown commences. Other than in this situation, an employer cannot nominate a particular date for annual holiday entitlement calculations, apart from to make adjustments for any leave without pay for more than one week. An employer who wants to implement more than one closedown in any year can if their employees agree but can’t make them take annual holidays using the above provisions. The date of entitlement to annual holiday is not adjusted by a second closedown.
It’s is important that employers comply with the notice period, we advise this is in writing either via email or hard copy to be able to prove that notice was provided in time.
The end of year festive season can be a quiet period for many businesses however, for those in the hospitality, restaurant, and retail industry, this is the key season for fixed term and casual work and some industries are looking to bolster their workforce and fill specific jobs and meet the increased customer demand.
For those businesses planning to stay open, during busy seasons, engaging employees on a fixed term basis will usually provide employers with the most flexibility in relation to fulfilling their resource requirements. Alternatively, casuals can be used however employers should be aware of the risks of engaging casual employees.
However, employers need to be extra aware of the requirements and obligations to all employees over this key period such as extra pay, an extra day off or extra alternative leave.
If you aren’t one of the businesses open over the Christmas period – it’s important to check the conditions relating to your right to send employees on an annual closedown. Seek professional workplace relations advice.
About Employsure.
Employsure is New Zealand’s leading outsourced HR solution for over 5,000 small and medium sized businesses; providing customised expert advice, documentation, and protection to manage their workplace with confidence. For more information on Employsure’s employment relations and health and safety solutions visit www.employsure.co.nz
