The Christmas and holiday season is almost upon us again, and we’re sure that many businesses are already making plans to maximise their business during this festive time.
One thing you may not have thought about is Christmas closedowns. If you’re planning to close down all or part of your business over the Christmas/New Year period, there are a few regulations that you may like to know about.
Can I closedown during the Christmas period?
Generally, businesses are allowed to have one customary closedown a year. Customary closedowns must be 12 months apart, however with the employee’s agreement a business can agree to additional times the operations are closed.
Can I make employees take annual leave during the closedown?
Yes, provided that employees are given at least 14 days’ notice.
What if an employee doesn’t have enough annual leave to cover the closedown period?
In this case an employee gets paid out as much as they have built up and, with the employer’s permission, that employee can take annual leave in advance.
Another option is for the employee to take leave without pay.
But there are also rules for employees who aren’t entitled to annual holidays.
Why wouldn’t an employee be entitled to annual holidays?
An employee may not be entitled to annual holidays for one or more of the following reasons:
They have not worked continuously for their employer for 12 months at the time of the closedown
They have worked for their employer for 12 months, but haven’t reached entitlement for annual holidays because they have taken unpaid leave of more than one week and this has moved out their anniversary date for annual holidays entitlement
They have had a period of receiving pay for annual holidays on a pay-as-you-go basis.
So what happens to these employees during a closedown? Does this mean I can’t closedown?
You may still closedown your business.
If the employee is paid leave on a pay-as-you-go-basis, the employer has already paid out the leave and as such, any closedown period will be unpaid.
With regards to employees who are accruing leave but are not entitled to annual holidays, they must be paid 8% of their gross earnings, from:
the start of their employment (if they haven’t worked continuously for 12 months for your business)
or their last anniversary date for annual holidays (if they have already worked for your business for at least 12 months). In this case you should deduct any leave already taken as annual holidays in advance
Employers may also choose to let the employee take annual leave in advance to top up their pay for the closedown period.
Paying out annual leave to employees who are not entitled to annual holidays for the closedown does, however, affect the employee’s anniversary date.
