Rules and entitlements during the end-of-year holiday season

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Published 7 October 2026

Free webinar for small business: Getting ready for the holiday season

We’re holding a free webinar for small business owners and anyone responsible for employing or managing staff. Whether you’re putting on Christmas casuals, shutting down for the holidays, approving leave or wondering about public holidays, we’ll help you better understand your obligations.

The webinar is on Wednesday 14 October 2026 at 2 pm AEDT.

For more information and to register, go to Webinars.

Employers and employees need to start planning for the end-of-year holiday season. Find out about the rules and entitlements that may affect you.

On this page:

Rules about annual leave during a shutdown

There are different rules that apply when a business shuts (called a shutdown) or reduces their staff numbers. These rules depend on what covers an employee.

Agreement or award employees

An employer can direct their employees to take annual leave during a shutdown if their awardAn award is a legal document that outlines the wages and conditions of employment for employees that are covered by it within a particular industry or occupation. Other known term: modern award. or enterprise agreementAn enterprise agreement sets out minimum employment conditions and can apply to one business or a group of businesses. allows it.

Most awards have rules about how and when an employer can direct their employees to take annual leave.

In most cases, the direction to take annual leave during a shutdown must be:

  • reasonable
  • in writing
  • given to affected employees within the required notice period.

Some awards allow employers and a majority of affected employees to agree on a shorter notice period for a shutdown.

An award can also include rules about when a business can close, such as the end-of-year period.

Many awards have clauses about annual leave during shutdowns. Each award and agreement is different, so employers should check theirs before they give employees any directions to use annual leave.

Example: Minimum notice of a shutdown

Joe is a full-time employee at a steel manufacturing factory.

Joe’s manager knows that December is a busy time for the business, so they schedule a shutdown for the first 2 weeks in January.

The business is covered by the Manufacturing Award. Joe’s manager checks the award and sees that:

  • the shutdown request must be reasonable
  • they need to give their employees at least 28 days notice
  • the notice must be in writing.

In the final week of November, Joe’s manager notifies Joe and the rest of the employees in an email that:

  • the business will close from 2 January to 16 January
  • they will need to take annual leave.

For more information, go to Direction to take annual leave during a shutdown.

If you’re covered by an agreement, search for it on the Fair Work Commission’s website at Find an enterprise agreement to check the rules that apply in your workplace.

Employees without enough annual leave to cover a shutdown

If the award or agreement allows it, employees can agree with their employer to take:

  • annual leave before they’ve accrued it
  • unpaid leave.

Awards and agreements without shutdown rules

Employers can’t direct their employees to take annual leave during a shutdown if their award or agreement doesn’t have rules allowing the direction.

However, employees can agree with their employer to take annual leave (including before they’ve accrued it) or unpaid leave during the shutdown.

Find out more about the Rules for taking annual leave.

Award and agreement free employees

If no award or agreement applies, employers can only direct the employee to take annual leave if the direction is reasonable.

For more information, go to Award and agreement free wages and conditions.

Tip: Use our annual leave templates

You can use our templates to help plan for annual leave during a shutdown.

To direct employees to take annual leave during a shutdown, employers can use our template, visit Notice of requirement to take annual leave.

For employees who don’t have enough leave to cover a shutdown, employers can use our template, visit Agreement to take annual leave in advance.

Working during a shutdown

An employee who continues to work during a shutdown, for example as part of a reduced staff to keep the core business running, should receive their normal pay.

If there is a public holiday during the shutdown, employees should still be given the day off without loss of pay, or they should be paid the public holiday rates under their award or agreement if they work.

Employee's right to disconnect during shutdown

Before shutting down for the end-of-year period, employers and employees should discuss if the employee will be required to be contactable or remain on call.

For more information, visit Right to disconnect.

Working overtime or on a public holiday

Employers can ask their employees to work overtime or work on public holidays if the request is reasonable. An employee can refuse a request to work if they have reasonable grounds.

When requesting that an employee work on a public holiday, employers need to consider all relevant circumstances. Whether a request is reasonable depends on several things, including:

  • the needs of the business
  • the role and responsibility of the employee
  • the employee’s personal commitments, like family or caring arrangements
  • how much notice the employee gets about the extra hours
  • what the employee’s contract says.

Example: Reasonable request to work on a public holiday

Sam is a store manager for a business that sells personal electronics such as TVs and computers.

As the business is in the retail industry, Sam’s employer wants to open on Boxing Day to run a big promotion. Sam’s employer has asked her to work on Boxing Day.

Sam considers the request to be reasonable and agrees to work. Sam understands that working on a public holiday is common for a manager in the retail industry.

Sam will get paid public holiday rates for the hours she works.

If an employee works overtime or on a public holiday, their award or agreement may give them additional entitlements such as:

  • penalty rates
  • a different day off
  • extra annual leave.

To calculate public holiday pay rates, use our Pay Calculator.

For more information, visit:

Paying employees who don’t work on a public holiday

When a full-time or part-time employee doesn’t work on a public holiday, the employee is paid at their base pay rate for the ordinary hours they would have normally worked. This applies even when an employee is on paid annual leave during a shutdown.

The minimum pay rate doesn’t include any loadings, overtime or penalty rates that they usually get for working that day. An employee’s roster can't be changed to deliberately avoid this payment.

For more information, go to Not working on public holidays.

Tip: Check payroll systems before a shutdown

Employers should check if they need to manually adjust their payroll system to ensure other paid leave (like annual leave) isn't incorrectly deducted during a public holiday.

Resources for young workers and students

Young workers and students often enter the workforce for the first time during the holiday period.

If you’re a young worker or student, you may be wondering about minimum working ages, how to prepare for your first day and what your pay and entitlements should be.

For more information, visit Young workers and students.

If you’re an employer, go to our Employing young workers best practice guide.

Tools and resources

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