How to manage the shutdown period

Employers in Australia are allowed to shut down their business temporarily, as long as they comply with relevant employment laws and regulations.

On 1 May 2023, rules around directing and taking annual leave during a shutdown period under the Health Professionals and Support Services Award 2020 and the Nurses Award 2020 were updated. 

Previous versions of the awards did not specify the amount of notice employers were required to provide employees, nor did it outline how the direction to take annual leave should be communicated by employers. 

You can manage a temporary shutdown effectively by planning ahead and communicating with employees in a timely and transparent manner. The communication should provide notice (as per the summary below) to the employees of the shut down period, including the expected duration and any requirements related to leave or other entitlements. You should also consult with employees to ensure that any concerns or questions are addressed and that the shut down is managed fairly and in accordance with employment laws.

In summary, the rules around directing and taking annual leave during a shutdown period have been updated to include the following:

• employers may require employees to take paid annual leave during a temporary shutdown
• employers must provide at least 28 days’ written notice of the temporary shutdown period to all impacted employees 
• the requirement to take annual leave must be reasonable 
• notice periods can be reduced if the majority of affected employees and their employer agree
• if an employee doesn’t have enough annual leave to cover all of the shutdown, the employee and employer can agree to alternative options for days not covered. This may include:
  • using other paid time off such as time off in lieu
  • annual leave in advance, or
  • taking leave without pay. 

Should public holidays occur during a shutdown period, employees will be paid for the public holidays during this period which fall on days they would normally work. 

All employees will continue to accumulate annual leave during a shutdown period, unless they’re taking leave without pay. 

Shutdown provisions in Modern Awards
Health Professionals and Support Services Award – Clause 27.5 Direction to take annual leave during shutdown 
Nurses Award – Clause 22.7 Direction to take annual leave during shutdown

	Workplace Relations Support  Workplace Relations Support can provide general advice to members on Modern Award enquiries and how clauses in awards relate to your staff. You can contact us via phone (07) 3872 2222 and email support workplacerelations@amaq.com.au.
	Workplace Relations Toolkit Workplace Relations Toolkit subscribers receive template documents such as practice policies. These policy templates include a leave policy that outlines shutdown periods.
	Workplace Relations Consultancy Workplace Relations Consultancy can review current policies you have in place and recommend the required amendments that should be made to ensure they remain consistent with the relevant awards.