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Annual closedowns

Many businesses have an annual closedown period, often over Christmas or seasonally based on industry. You can ask your employees to take annual holidays during the closedown, provided you give them 14 days’ notice. Depending on an employee's duration of employment, there are different rules that apply.

Less than one year

If the employee has been employed for less than one year, or they're not yet entitled to annual holidays (as per s16 of the Holidays Act) at the time of the closedown, you must pay them 8% of their gross earnings (less any amount already paid as 8% pay as you go or already taken as annual holidays in advance) as at the closedown date.

In addition:

  • the employee’s anniversary date for annual holiday entitlement purposes is moved to the date the closedown starts (or in some situations an alternate nominated date within reasonable proximity to the closedown date)

  • the employee may agree to take some annual holidays in advance.

Here are the details:

More than one year

In this case, process the employee's leave as normal. If they have no leave available, or not enough to cover the shutdown period, you can agree with them to use leave in advance or leave without pay.