Christmas shutdown and annual leave: can your employer make you take it?

Can your employer make you take annual leave over Christmas?

It depends on what covers you. If an award or enterprise agreement applies, your employer can direct you to take annual leave during a shutdown only if that award or agreement allows it. Most awards have rules about how and when, and in most cases the direction must be reasonable, in writing and given to the affected employees within the required notice period. An award may also restrict a shutdown to certain times, such as the end-of-year period.

If your award or agreement has no rules allowing the direction, your employer can't direct you to take annual leave, although you and your employer can agree that you take annual leave, including before you have accrued it, or unpaid leave during the shutdown. If no award or agreement applies to you, your employer can require you to take paid annual leave if the requirement is reasonable. The Fair Work Ombudsman says this includes a temporary shutdown between Christmas and New Year.

• Check your award's closedown or annual leave clause for the notice period: some awards allow a shorter notice period if the employer and a majority of affected employees agree.
• The Fair Work Ombudsman's example is a food manufacturer whose award requires a reasonable, written direction with at least 28 days' notice. Notice periods differ between awards, so the 28 days is not a general rule.
• If an enterprise agreement covers you, search for it on the Fair Work Commission's agreement database and read its shutdown clause: the agreement's rules replace the award's.

How you are paid during a shutdown

If you are directed to take annual leave, you are paid for it as annual leave at your base rate for the hours you would have worked, plus any leave loading your award provides. Leave loading is not part of the National Employment Standards. It comes from your award or agreement: under the Hospitality Award, for example, it is a flat 17.5%. The leave loading calculator shows the figure for your award.

If you continue to work while the business shuts down, you should receive your normal pay. If there is a public holiday during the shutdown, you should be given the day off without loss of pay, or be paid the public holiday rate under your award or agreement if you work.

Worked example: a Monday 28 December 2026 to Friday 8 January 2027 shutdown

A full-time employee who works Monday to Friday, 7.6 hours a day, in any state or territory, where Monday 28 December 2026 and Friday 1 January 2027 are both public holidays.

Before tax. The two public holidays are paid separately as public holidays at your ordinary base rate for the day and are not taken out of the leave balance. Whether a leave loading applies, and how it is worked out, depends on your award: see the leave loading calculator.

Public holidays during the shutdown

A public holiday that falls on a day you would normally work is paid as a public holiday, even when you are on paid annual leave during a shutdown. The Fair Work Ombudsman says an employee's base pay rate for their ordinary hours applies, and employers should check whether they need to adjust payroll so that annual leave isn't incorrectly deducted for the public holiday.

That is why the example above uses 8 days of leave, not 10. Christmas Day and Boxing Day fall before the shutdown in 2026, but the additional Boxing Day holiday on Monday 28 December and New Year's Day on Friday 1 January do fall inside it, and neither is charged to your leave balance. Public holidays in unpaid leave are not paid.

What if you don't have enough annual leave?

If the shutdown is longer than your leave balance, the Fair Work Ombudsman says that, if your award or agreement allows it, you can agree with your employer to take annual leave before you have accrued it, or unpaid leave. This is by agreement, not a direction. Get any such agreement in writing.

Part-time employees use leave only for the days they would have worked. A part-timer who works Tuesday to Thursday is charged for those days in the shutdown, not for Monday or Friday.

Casual employees and shutdowns

Casual employees are not entitled to paid annual leave under the National Employment Standards (Fair Work Act s 86), so a shutdown means no work and no pay unless your employer offers shifts. Casuals have no paid annual leave to be directed to take.

A shutdown is not a stand down

A shutdown is a planned closure, such as over Christmas and New Year. A stand down is when an employer tells employees not to work because they can't be usefully employed for a reason outside the employer's control, such as an equipment breakdown that isn't the employer's fault or a natural disaster. Different rules apply: see the Fair Work Ombudsman's stand down page. A planned Christmas closure is a shutdown, so the annual leave rules above are the ones to check.

Contact and right to disconnect

Before shutting down, employers and employees should discuss whether you are required to be contactable or on call. The Fair Work Ombudsman points to the right to disconnect as relevant here, so get any expectation to be reachable over the break settled in writing.

More holiday pay guides

Every public holiday is paid by the same rules, but the dates, extra days and part-day windows differ. The public holiday pay guide has the full 14-award rate table, and each state page lists that state’s own days.

Christmas shutdown and annual leave questions