Undoubtedly, one of the main reasons for the spring in everyone's step at this time of year is the fast approaching holiday period. It's that time when many of us take advantage of public holidays and eat into a good portion of annual leave to unwind and recharge for the next year ahead. In the corporate world, most workplaces will typically shut-up shop just prior to Christmas Day, and employ only skeleton staff until the first week of the new year.

As a result, employers tend to direct that their employees take annual leave over shut down periods. The Fair Work Act 2009 (Cth) permits that employees can be required to take accrued annual leave, but only where it is reasonable in the circumstances to do so. One such reasonable circumstance is often the business shut down which occurs over the Christmas/New Year period. This has been reinforced by the recent decision of United Voice v Valspar (WPC) Pty Ltd (t/as Wattyl) [2013] FCCA 1437, where the Federal Circuit Court found that directing employees to take single days of annual leave over the Christmas holiday period to ensure that production rates decreased was reasonable. Judge Denys Simpson found that an intention of "temporarily closing the establishment or a section of it… had the necessary purposes" for the employer's requirement to amount to a reasonable direction.

Where employees may be required to take leave, employers should also be wary to ensure compliance with any relevant modern awards or enterprise agreements. Employers should also comply with their own company policies and procedures relating to leave.

Importantly, as much notice as possible should be given to employees of the shut down periods so that employees are mindful of the amount of leave they need to take and whether they will have this amount accrued. This will also enable employers to discuss mandated leave with employees who may not wish to take time off, and ensure their preferences are accommodated in a way which works for all parties.

Inevitably, employers may be faced with employees who do not have sufficient annual leave accruals for the annual shut down. In these circumstances, depending on the amount of leave an employer requires employees to take, an agreement may be reached with the particular employee to take annual leave in advance of its accrual, or to take a period of unpaid leave. In most instances, though, an employee cannot be directed to take unpaid leave.