Direction to take leave when an employer shuts part of a business

Can an employee be directed to take leave?

This depends on:

  • whether the employee is covered by an award or agreement
  • what the award or agreement says.

A shutdown is when a business temporarily closes for a period, such as during Christmas and New Year.

Award and agreement covered employees

Generally, employees that work in a part of a business which is being shut down can be made to take paid annual leave but employees in other parts of the business can’t.

Some awards and agreements can have different rules about shutdowns. For example, an agreement might say that all employees can be made to take annual leave, even if their part of the business is still open.

What if the employee isn’t covered by an award or agreement?

These employees can only be made to take leave if it’s reasonable.


Jan and Kate work for BigCo Pty Ltd. Their employment isn’t covered by an award or agreement.

Jan’s section is being shut down for Christmas, but Kate’s is still working. Their employer wants both of them to take annual leave for the shutdown.

Because Jan’s section will be shut down, it’s reasonable for her employer to require her to take annual leave. Kate’s section is still operating, so it’s not reasonable to make her take annual leave.


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