With the Christmas holidays fast approaching, we thought it would be helpful to answer some key questions that are often asked by employers at this festive (and somewhat hectic) time of year.
Yes, an employer can closedown operations and require an employee to take their annual leave at a particular time each year. For most employers this occurs over the Christmas and New Year period, generally running for two – three weeks. An employer must give employees at least 14 days’ notice in writing that a closedown period will be enforced. Ideally, this would be referred to in employment agreements as well.
An employer can only enforce a closedown once within a 12-month period (although an employer can have different closedown periods across different parts of their business). However, this does not stop an employer from asking their employees to take leave (by agreement) over the Christmas break. Most employees will want to take some sort of a holiday, albeit perhaps not a full two – three weeks. See the below section on requiring an employee to take annual leave outside of a closedown period.
Yes, employees can be required to ‘discontinue their work’ (i.e. to take unpaid leave) provided they are given at least 14 days’ written notice of the requirement. An employer may also agree to let employees take annual leave in advance to cover the closedown period.
In the first instance, employers and employees must attempt to reach an agreement on when annual leave will be taken. Good faith obligations are very important here! Where an agreement cannot be reached, an employer can require an employee to take annual leave at a particular time by giving the employee 14 days’ written notice. The key difference between this and a closedown period, is that the employer must first engage with the employee to try and come to an agreement, before giving notice of the requirement for the employee to take leave.
Christmas Day, Boxing Day, New Year’s Day and 2 January all fall on weekdays this summer (Thursdays and Fridays), which means they will be observed on the days they fall. Where an employee usually works on Thursdays and/or Fridays, they will be entitled to paid public holidays on those dates.
Our December 2020 article provides an in-depth guide on how to pay employees for working on a public holiday: employmentlawyers.co.nz/top-tips-for-the-christmas-period/
Where a public holiday falls on a day when an employee is already on annual leave due to a closedown period, that day doesn’t count as an annual leave day (aka, it should not be deducted from an employee’s annual leave balance), provided that it would have been an otherwise working day for the employee if there was no closedown.
During a closedown, if the day on which an employee is sick is an otherwise working day for the employee (but for the closedown), they are entitled to paid sick leave rather than drawing on their annual leave balance. However, where an employee is on annual leave outside of a closedown period and they become sick, there is no mandatory obligation on the employer to allow the employee to take sick leave. That said, a fair and reasonable employer might still allow sick leave to be taken, if the employee supplies a medical certificate or proof of a positive COVID test for example.
If you have any questions about your upcoming holiday/closedown obligations, please do not hesitate to contact us.
