Managing the Christmas closedown

With the days getting longer and warmer, most of us are beginning to focus on a long summer holiday relaxing at the beach. The Christmas period is usually a quiet time for many businesses, and as an employer you may be considering a summer closedown.

So, what is a closedown?

A closedown is when an employer customarily closes their business for a period of time. This often occurs over the Christmas period, but for some industries it may be at the end of a season.

A closedown can be across an entire workplace or only part of the business, but it's important to understand you can only implement this type of closure once a year.

How does a close-down effect annual leave?

  • During a closedown, you can require all or some of your employees to take annual leave.
  • If you have a team member who has been employed for less than 12 months, they may not have accrued enough holiday pay. In this case, they should be paid 8% of their gross earnings less any leave already taken.
  • If you have an employee without enough annual leave owing, they would need to either take leave without pay or request annual leave in advance. Before paying annual leave in advance, check you have a clause in your employment contracts that money can be deducted from an employees final pay if the employee has not accrued enough leave before moving on. This clause is covered in the standard HRtoolkit employment agreements.
  • If a public holiday occurs during the closedown period, employees are entitled to paid public holidays, irrespective of how much annual leave they have (or have not) accrued.

How should I announce a closedown?

It’s important to consider what an annual closedown will mean for you, your business and your team.

Company closedowns are legislated for in the Holidays Act 2010, and although you can legally give your employees as little as 14 days notice, it’s best to let them know well in advance.

If you are considering implementing a regular closedown period, you may want to ensure you have it documented in your annual leave policy or code of conduct documentation.

It’s also a good idea to communicate with your team in writing, so there’s no confusion about when the closedown is occurring.

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