Managing Annual Leave Over the Christmas Closedown Period

Managing Annual Leave Over the Christmas Closedown Period

It’s that time of year again, less than one month until Christmas. Many workplaces in New Zealand will be planning their annual closedown over the Christmas period. We have set out some common questions we are often asked at this time of the year.

Can we enforce a closedown of our workplace at Christmas?

The Holidays Act 2003 specifically provides for annual ‘customary’ closedowns. A closedown period can be enforced where there is a clear custom and practice of a closedown period in the workplace or where they are provided for in the employment agreement.  

The requirement that the closedown is a ‘customary’ closedown means that employers who have not had a closedown period must seek the agreement of their employees on the arrangements for a closedown.

Employers are able to have one closedown per year, provided they give 14 days’ notice to all employees before the shutdown commences.

Can I require my employees to take annual leave during the closedown?

If an employee is entitled to annual holidays at the commencement of the closedown period, an employer can require the employee to take annual leave.

What happens if my employee does not have enough leave for the whole of the closedown?

If an employee’s annual leave does not cover the whole of the closedown period, the employee and employer can agree that annual leave is taken in advance. The employee would have a negative leave balance.

What about employees who have worked for less than 12 months, and may not have accrued enough annual leave

In this situation the employees should be paid 8% of their gross earnings from the start of their employment up until the commencement of the closedown period (less any payment already taken for annual leave). The employee’s anniversary date for annual holiday entitlement purposes then moves to the date of the start of the closedown date. In addition, the employee and employer may agree that the employee takes leave in advance for some or all of the closedown period.

Please direct any enquiries to:

Melissa Johnston (Partner) in the Employment Team on (09) 306 6729 (mjohnston@mcveaghfleming.co.nz)

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© McVeagh Fleming 2020

This article is published for general information purposes only.  Legal content in this article is necessarily of a general nature and should not be relied upon as legal advice.  If you require specific legal advice in respect of any legal issue, you should always engage a lawyer to provide that advice.