New Model Shutdown Period Clause in 78 Modern Awards

On 1 May 2023, 78 modern awards (listed at the end of this article) were varied to insert a new model clause dealing with temporary shutdown periods. The new clauses remove the ability of an employer to direct an employee to take unpaid leave during a shutdown period.

What has changed?

On 25 August 2022, the Full Bench of the Fair Work Commission (FWC) made the ‘provisional decision’ to vary existing clauses addressing temporary shutdown periods in modern awards. This decision was confirmed in December 2022.

Previously, certain modern awards provided for employers to direct employees to take annual leave and leave without pay during a shutdown period. The provisions dealing with shutdown periods differed across awards.

However, as of 1 May 2023, new clauses have been inserted that permit an employer to direct an employee to take annual leave during a shutdown only if:

• They have provided a minimum of 28 days’ written notice (subject to agreement as to a lesser period) of a shutdown to employees, or a greater period if one previously existed in the award.
• The shutdown period is ‘temporary’ and any direction to take paid annual leave by an employer must be ‘reasonable’ and given in writing.

The new model clause has been adapted to ensure existing limits on the application of shutdown provisions in an award are preserved. Further, in respect of any period of the shutdown to which a direction does not apply, leave without pay or annual leave in advance may be taken by agreement.

In its decisions, the FWC emphasised that an employee does not have a general entitlement to take leave without pay and that a modern award term permitting an employer to direct an employee to take leave without pay is inappropriate.

The FWC also confirmed that requiring an employee to take leave without pay would amount to a ‘stand-down’ and would need to occur in accordance with the terms of an enterprise agreement, employment contract or otherwise in accordance with s 524 of the Fair Work Act 2009 (Cth) (FW Act).

How can employers comply with these changes?

• Employers should review their current temporary shutdown processes to ensure that they are consistent with applicable modern award clauses.They should also ensure that their enterprise agreements and employment contract templates accommodate instances in which a stand-down might be necessary.
• Annual leave is generally taken as agreed between an employer and employee, but employers cannot unreasonably refuse such requests.If an employer refuses a request for leave to ensure that an employee has sufficient accrued leave to cover a shutdown period, this would be unlikely to be considered ‘unreasonable’ under s 88(2) of the FW Act.
• Employers should ensure their managers are aware of the need for employees to have sufficient accrued leave for shut down periods and understand how to provide valid notices and directions required under the new model clause.
• If an employee has insufficient annual leave accrued to cover a shutdown period employers should consider whether the period may be covered using accrued rostered days off, time in lieu of overtime or annual leave in advance.
• If an employee does not take leave during a shutdown, employers should consider whether there is useful work that can be performed (provided this is within the terms of the relevant modern award provisions dealing with the employer and employee duties).

How we can help?

For advice regarding how this change may affect your workplace, contact a member of our Workplace Relations, Employment and Safety team.

If you would like to stay up-to-date with Alerts and Insights from our Workplace Relations, Employment and Safety team, you can subscribe to our mailing list here.

This article was prepared with the assistance of Jack Kneale, Law Graduate.

List of affected modern awards

1. Aboriginal and Torres Strait Islander Health Workers and Practitioners and Aboriginal Community Controlled Health Services Award 2020 (clause 22.3)
2. Aircraft Cabin Crew Award 2020 (clause 19.4)
3. Airline Operations–Ground Staff Award 2020 (clause 22.6)
4. Alpine Resorts Award 2020 (clause 25.3)
5. Aluminium Industry Award 2020 (clause 22.4)
6. Ambulance and Patient Transport Industry Award 2020 (clause 22.7)
7. Animal Care and Veterinary Services Award 2020 (clause 22.5)
8. Aquaculture Industry Award 2020 (clause 22.9)
9. Asphalt Industry Award 2020 (clause 21.8)
10. Banking, Finance and Insurance Award 2020 (clause 22.5)
11. Black Coal Mining Industry Award 2020 (clause 24.9)
12. Broadcasting and Recorded Entertainment Award 2020 (clause 18.6)
13. Building and Construction General On-site Award 2020 (clause 31.3)
14. Business Equipment Award 2020 (clause 23.5)
15. Car Parking Award 2020 (clause 24.6)
16. Cemetery Industry Award 2020 (clause 19.3)
17. Cement, Lime and Quarrying Award 2020 (clause 22.8)
18. Cleaning Services Award 2020 (clause 21.4)
19. Clerks—Private Sector Award 2020 (clause 32.5)
20. Coal Export Terminals Award 2020 (clause 20.7)
21. Commercial Sales Award 2020 (clause 20.6)
22. Concrete Products Award 2020 (clause 22.6)
23. Contract Call Centres Award 2020 (clause 22.10)
24. Educational Services (Post-Secondary Education) Award 2020 (clause 22.5)
25. Electrical Power Industry Award 2020 (clause 21.8)
26. Electrical, Electronic and Communications Contracting Award 2020 (clause 21.5)
27. Fitness Industry Award 2020 (clause 21.3)
28. Food, Beverage and Tobacco Manufacturing Award 2020 (clause 25.11)
29. Gardening and Landscaping Services Award 2020 (clause 20.9)
30. Gas Industry Award 2020 (clause 20.7)
31. General Retail Industry Award 2020 (clause 28.4)
32. Graphic Arts, Printing and Publishing Award 2020 (clause 31.12)
33. Hair and Beauty Industry Award 2020 (clause 24.3)
34. Health Professionals and Support Services Award 2020 (clause 26.5)
35. Higher Education Industry—General Staff—Award 2020 (clause 24.4)
36. Horse and Greyhound Training Award 2020 (clause 18.6)
37. Hospitality Industry (General) Award 2020 (clause 30.4)
38. Hydrocarbons Industry (Upstream) Award 2020 (clause 25.7)
39. Joinery and Building Trades Award 2020 (clause 27.9)
40. Journalists Published Media Award 2020 (clause 20.8)
41. Legal Services Award 2020 (clause 22.7)
42. Local Government Industry Award 2020 (clause 23.5)
43. Manufacturing and Associated Industries and Occupations Award 2020 (clause 34.7)
44. Meat Industry Award 2020 (clause 25.8)
45. Mining Industry Award 2020 (clause 22.7)
46. Mobile Crane Hiring Award 2020 (clause 24.6)
47. Miscellaneous Award 2020 (clause 21.4)
48. Nursery Award 2020 (clause 22.12)
49. Nurses Award 2020 (clause 22.7)
50. Oil Refining and Manufacturing Award 2020 (clause 24.6)
51. Pest Control Industry Award 2020 (clause 23.9)
52. Pharmaceutical Industry Award 2020 (clause 21.5)
53. Plumbing and Fire Sprinklers Award 2020 (clause 24.4)
54. Poultry Processing Award 2020 (clause 21.5)
55. Premixed Concrete Award 2020 (clause 22.8)
56. Professional Employees Award 2020 (clause 18.4)
57. Racing Clubs Events Award 2020 (clause 23.5)
58. Racing Industry Ground Maintenance Award 2020 (clause 21.5)
59. Real Estate Industry Award 2020 (clause 20.5(a))
60. Registered and Licensed Clubs Award 2020 (clause 25.4)
61. Restaurant Industry Award 2020 (clause 25.4)
62. Road Transport (Long Distance Operations) Award 2020 (clause 20.4)
63. Road Transport and Distribution Award 2020 (clause 24.9)
64. Salt Industry Award 2020 (clause 23.10)
65. Seafood Processing Award 2020 (clause 21.11)
66. Security Services Industry Award 2020 (clause 21.4)
67. Silviculture Award 2020 (clause 22.5)
68. Storage Services and Wholesale Award 2020 (clause 24.5)
69. Sugar Industry Award 2020 (clause 31.5)
70. Supported Employment Services Award 2020 (clause 32.3)
71. Surveying Award 2020 (clause 22.7)
72. Telecommunications Services Award 2020 (clause 22.9)
73. Textile, Clothing, Footwear and Associated Industries Award 2020 (clause 32.6)
74. Timber Industry Award 2020 (clause 28.10)
75. Vehicle Repair, Services and Retail Award 2020 (clause 29.6)
76. Water Industry Award 2020 (clause 22.4)
77. Wine Industry Award 2020 (clause 24.9)
78. Wool Storage, Sampling and Testing Award 2020 (clause 23.5)

All current modern awards may be accessed from the FWC website.