Notice of Requirement to Take Annual Leave for Purpose of Close Down

Notice of requirement to take annual leave (excessive leave / closedown)

If your modern award allows it, you can require your employees to take annual leave when they have an excessive balance or during a period when your business will be closed. Check your modern award carefully before using this letter.

Background Information

Award / agreement - free employees

UnderSection 94(5)of the Fair Work Act an employer may require anaward/agreement-free employeeto take a period of annual leave, but only if the request is reasonable.

Examples of a ‘reasonable request’ include situations when the employee has accrued an excessive amount of annual leave (eight weeks or more) or the employer’s business is being shut down for a period (e.g. Christmas–New Year close down).

Modern awards

Where a modern award applies to an employee, the ‘standard’ annual leave clause usually provides that if an employer has genuinely tried to reach genuine agreement with an employee as to the timing of taking annual leave, the employer can require the employee to take annual leave by giving at leastfour weeks’ notice to the employee if the employee has at leasteight weeks or more accrued annual leave, and the amount of annual leave directed to be taken is no more thanone-quarter of the amount of leave accrued.

Employees can also be directed to take leave at the time of an annual close-down under the standard award clause.

Reference should be made to the applicable modern award to determine the circumstances under which the employer has the right to direct an employee to take annual leave.

If at any time you need more information or assistance, contact one of our HR Consultants.

Step by step process

Step 1:Check your modern award

You can only require employees to take annual leave because they have more than 8 weeks accrued, or during a close down period if it is allowed under your modern award.

Check your modern award carefully to see if it includes this provision, and if there are any other requirements or conditions you must fulfill, such as providing notice.

Step 2:Talk to the employee

You should meet with the employee to discuss their accrued annual leave and how they will reduce it. At his meeting you can determine why the employee has accrued this amount of leave, advise them that you would like them to take some of their annual leave, and agree on a time to do so.

Alternatively, if you are planning a close down period, you should meet with your employee to advise them and give them the opportunity to ask questions. You should ensure that the employees understand:

• the reason for the close down (e.g. Christmas holidays, renovation)
• the length of the close down
• that they will receive paid annual leave during the close down, and
• that this annual leave will be deducted from their accrued entitlements.

Step 3:Create your letter of notice of requirement to take annual leave

You must provide your employees with at least 4 weeks’ written notice of the requirement to take annual leave.

This notice should include the dates the leave will start and finish, and the reason for taking the leave (excessive leave / closedown).

This template has been colour coded to assist you to complete it accurately. You simply need to replace the red writing with what applies to your employee and situation. Explanatory information is shown in blue italics to assist you and should be deleted once you have finished the letter.

Step 4:Provide the letter to the employee and keep a copy for your records

Provide the letter to the employee, ensuring they receive it at least 4 weeks before the start of the close down period.You should also keep a copy of the letter for your records.

The information contained in this document is general in nature. You must not rely on the information in this document as an alternative to legal advice from an appropriately qualified professional. If you have any specific questions you should consult one of our HR Professionals.

Print on your business letterhead

Date

Private and confidential

Insert name
Insert address

Dear insert name

Notice of requirement to take annual leave

I am writing to inform you that <insert company name> requires you to take annual leave due to a close down of operations from <insert commencement date> to <insert end date>, due to <reason for close down i.e. refurbishment/closing for an extended period over Christmas etc>. This period of leave will be deducted from your accrued entitlement.

or

As discussed on <insert date of verbal discussion regarding extensive accumulated annual leave>, you currently have <insert amount of accumulated annual leave in weeks and days calculated to the date of this letter>.

<Insert company name> is required to provide you with at least 4 weeks notice of a requirement to take annual leave under the applicable modern award. Please consider this letter as your 4 weeks’ notice commencing on the date of this letter <date of the letter provided to the employee>.

Your base rate of pay for your ordinary hours of work will continue to be paid to you throughout the leave period. Annual leave loading will also be payable in some instances.

Should you have any questions in relation to this letter, please contact me on <insert phone number>.

Yours sincerely,

<Insert name>

<Insert position>