Time to Think About the Christmas Closedown

Annual closedowns, such as over the Christmas and New Year period, allow organisations to temporarily shut down while requiring employees to take leave. To be able to have an annual closedown it must be customary (i.e. happen every year) and only one closedown period is permitted in each 12-month period. An employer may have different closedown periods for each separate part of the employer’s business, and they don’t have to be just during the Christmas and New Year period.

The key difference between ordinary leave and a closedown is that you can require employees to be on leave, even if they have no leave owing.

You must provide employees with at least 14 days’ written notice of the closedown, outlining the start and end dates.

If employees have annual leave entitlement or accrual, they must take this leave during the closedown. If they don’t have enough leave accrued, they take unpaid leave.

For employees not yet entitled to annual leave, you must pay them 8% of their gross earnings since the start of their employment less any amount paid to the employee for annual holidays taken in advance and treat the closedown as the start of their new annual leave entitlement year.

If any public holidays fall during your closedown, employees who would normally work on those days are entitled to be paid for them. These holidays are not deducted from their annual leave balance.

Navigating annual closedowns can be tricky, but compliance is essential. If you’re unsure about your obligations or have specific questions, feel free to contact us. We’re here to help you ensure your business is operating within the legislation.