Christmas shutdown: employees need 28 days' written notice

What counts as a shutdown

A shutdown is when your business (or part of it) temporarily stops operating — the classic example being the Christmas and New Year break. It's different from a stand down, which is when you can't provide work because of something outside your control, such as equipment breakdown or a government direction.

The 28-day rule comes from the shutdown clauses that were written into many modern awards from 1 May 2023. They apply when you intend to close all or part of your operation for a particular period and you want affected employees to take paid annual leave over it.

The 28-day written notice rule

Where your award or enterprise agreement has a shutdown clause, you must give affected employees at least 28 days' written notice of the temporary shutdown period. A shorter period is only allowed if you've agreed it with the majority of the employees affected. The notice has to be in writing — a hallway conversation or a group chat message doesn't count.

Any direction to take annual leave must also be reasonable. Telling someone with no accrued leave to take four weeks unpaid, or giving notice so late that staff can't make plans, is where these directions get challenged.

• Notice must be in writing and reach affected employees at least 28 days before the shutdown starts.
• A shorter notice period needs agreement from the majority of affected employees.
• Anyone hired after the notice goes out must be told as soon as reasonably practicable.
• The direction to use annual leave must be reasonable, and must be confirmed in writing.

Count back from your closing date

Work out the first day you'll be shut and count back 28 days — that's the last day your notice can go out, not the day you write it. For a typical Far North Queensland Christmas break, the dates land like this:

• Shut from Thursday 24 December 2026 — notice out by Friday 27 November 2026.
• Shut from Wednesday 23 December 2026 — notice out by Thursday 26 November 2026.
• Shut from Thursday 1 January 2027 — notice out by Friday 4 December 2026.

What the notice should say

Keep it short, factual and dated. A one-page letter or email covers it:

• The exact dates the business will be closed and the date everyone is back at work.
• Which employees or which part of the operation the shutdown affects.
• That employees will be directed to take paid annual leave for the shutdown period, and the dates that leave covers.
• How staff can check their annual leave balance, and who to speak to if they don't have enough leave.
• Any arrangement you've agreed instead of paid leave — time off in lieu, leave in advance, or unpaid leave — confirmed in writing.

What if staff don't have enough annual leave?

This is the part that catches people out. You can only direct employees to take leave they've actually accrued. For the days that aren't covered, you can agree in writing to use accrued time off in lieu, annual leave in advance, or leave without pay.

If an employee agrees to unpaid leave, they may still be entitled to be paid for public holidays that fall on days they would normally have worked — it depends on their ordinary hours, the award or agreement, and what you've agreed. And if your award or agreement doesn't let you direct leave at all, an employee can still agree to take it; without their agreement, you may need to pay their usual wages for the hours they didn't work.

Casuals, new starters and award-free staff

Casual employees don't accrue annual leave, so a shutdown is a different conversation — check what your award says about minimum payments and whether you've rostered them through the break. If you've hired anyone after the notice went out, give them written notice of the shutdown as soon as reasonably practicable.

Employees who aren't covered by an award or agreement don't have a fixed notice period: you can require annual leave as long as the requirement is reasonable, and a shutdown between Christmas and New Year is the example the legislation itself gives. Even so, give as much notice as you can.

The payroll and bookkeeping side of the break

A shutdown has a cash-flow and paperwork tail that's easy to forget once the rosters are done. Payday Super applies over the holidays like any other period: super needs to reach each employee's fund within seven days of payday, so plan those payments alongside the pay runs you bring forward before you close.

Budget for the annual leave being paid out, and remember public holidays and leave accruals still run while the doors are shut. Finalise your Single Touch Payroll reporting before you go, and if you're a monthly GST or BAS lodger, check whether your activity statement falls due while you're away.

• Bring pay runs forward if the office closes, and pay super with them within seven days.
• Allow for annual leave payments, public holiday pay and accruing leave in your cash-flow plan.
• Complete STP reporting and finalise any pending payslips before the break.
• Check BAS and super lodgement dates that fall inside the shutdown and lodge early.

A short checklist before you tell the team

If you're not sure which award covers your people, check the contract, the Fair Work Ombudsman's pay and conditions tool, or an employment adviser — we're bookkeepers, not employment lawyers, and this is the kind of question worth getting a definitive answer on.

• Check the shutdown clause in each employee's award or enterprise agreement — they aren't all the same, and some only allow closures during certain periods.
• Confirm each employee's accrued annual leave balance before you direct them to use it.
• Write and date the notice, then send it so it lands at least 28 days ahead.
• Get any alternative arrangement (TOIL, leave in advance, unpaid leave) agreed in writing.
• Brief anyone hired after the notice goes out.
• Diary the pay runs, super payments and lodgements that fall over the break.

Want the numbers behind your shutdown?

Our Cairns-based team handles payroll, STP, Payday Super and BAS for businesses across Far North Queensland and Australia-wide. If you're planning a Christmas shutdown, we can help you forecast the leave payouts, get the pay runs and super payments timed correctly, and make sure nothing lodges late while you're away.