9.05.2018

Christmas/Annual Closedown Periods

Employers are entitled to have a Christmas closedown – provided they customarily have had a closedown period.  Unfortunately, what constitutes “customarily” is somewhat unclear: an employer that has always closed down over Christmas will be fine, but what about, for example, a new (Greenfields) business wanting to close down at some point in its first year of operation?  Factually, such businesses can’t customarily have had a closedown period because they did not exist before.  Whether the Courts will allow a ‘start-up’ to have a closedown is unknown.

Where an employer has customarily had a closedown period, then they can continue that practice provided that:

  • They give employees at least 14 days notice of the closedown; and
  • Employees are informed that they will be required to take annual holidays during the closedown.

If an employer is going to have a closedown period, best practice is for them to tell employees in writing – a general memo about when the business will close and reopen and that employees will need to take annual holidays is acceptable.

If specific employees do not have sufficient holiday entitlements (which will include those within their first year of employment), then send them a personal letter.  These employees will be paid at 8% of their gross earnings to the date of commencement of the closedown and the employer may discontinue their work during the closedown period.

If an employer has not previously had a closedown period, then, under the Holidays Act 2003, they cannot decide to start the practice now.  However, the Holidays Act allows an employer and employee to agree to take annual holidays, or, if there is no agreement, an employer can direct an employee to take annual leave by giving at least 14 days notice (there may be greater notice or different provisions in an employment agreement).  Through that process, an employer could direct all employees to take their annual leave entitlement – creating a de facto closedown period.  However, an employer could not direct an employee who has no entitlement to annual leave to take leave in advance or leave without pay.

Do you need expert legal advice?
Contact the expert team at Hesketh Henry.
Kerry_100x100 1
Media contact - Kerry Browne
Please contact Kerry with any media enquiries and with any questions related to marketing or sponsorships on +64 9 375 8747 or via email.

Related Articles / Insights & Opinion

COVID-19 Redundancies: Cutting Corners Courts Censure
The Employment Relations Authority (Authority) has recently issued a determination that considers redundancies implemented due to the Government’s COVID-19 restrictions:  De Wys and Jenney v Solly...
13.08.2020 Posted in COVID-19 & Employment Law
Losses caused by 2011 earthquakes not a “series of losses”
Moore v IAG New Zealand Limited [2020] NZCA 319
12.08.2020 Posted in Insurance Law
Cancelled Plans and Future Liabilities: A post lockdown annual holidays FAQ
COVID-19 has not only hit many employers hard in terms of economic impact, it has also confronted employers with many employment challenges that require urgent attention.
04.08.2020 Posted in Business Advice & Employment Law
A high bar to set aside statutory demands to enforce adjudication determinations under the Construction Contracts Act 2002
The “pay now argue later” principle underpins the Construction Contracts Act 2002 (CCA).  The recent decision of C&R Property Development Ltd v MR Civil Ltd confirms the importance of this pr...
31.07.2020 Posted in Construction Law
Design life in the spotlight
Blackpool Borough Council v Volkerfitzpatrick [2020] EWHC 1523 (TCC) In 2009, Blackpool Borough Council (Principal), as principal, contracted with Volkerfitzpatrick Ltd (Contractor), as head contracto...
COVID-19 and the Future of Force Majeure
Not since Y2K have force majeure clauses been of so much focus.
Shareholder Agreements:  The Corporate “Pre-nup”
You’ve got a great idea for a business and you’re pumped to get to work. 
23.06.2020 Posted in Business Advice & Company Law
Send us an enquiry
For expert legal advice, please complete the form below or call us on (09) 375 8700.
  • This field is for validation purposes and should be left unchanged.