Customary Closedowns

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Closedowns over the summer months


The Holidays Act allows your businesses to closedown once per year, allowing your staff to take annual holidays, refresh and recharge for, in most cases, the Christmas break.


However, there are certain rules that apply depending on your employees' work situation:

  • Employees who are entitled to annual holidays at the time of the closedown, must be provided with 14 day's notice in order to cease work. They are then to take a portion of annual holidays to cover the closedown.
  • If these employees do not have enough annual holidays to cover the closedown, you can agree for them to take some leave without pay or leave in advance.

What about my employees who aren't yet entitled to annual leave?


Employees who have yet to establish 12 months of continuous employment are to be paid 8% of their gross earnings, since their last anniversary date. In addition to this, their anniversary date realigns to near the start of the closedown. This means that this date will be their new anniversary date for future annual holiday entitlement. There is also an option for you and your employees to agree to take additional leave in advance.


Public holidays that fall during a closedown period:


When a public holiday falls during a closedown period, the closedown is treated as having not been in effect and your employees are entitled to be paid for these public holidays if they would have otherwise worked on the day.


Other things to keep in mind:


  • The Holidays Act provides for one closedown per year. There is nothing stopping your business from having more than one, however the special provisions will not apply. In cases like these, you will need to negotiate with your staff so that continuity of income is ensured.
  • You must provide no less than 14 day's notice. If you fail to provide the correct amount of notice prior to a closedown, the closedown can be considered not in effect! So be sure to always provide this period of notice to your staff.
  • There will be some employees who have commenced work with you very close to the closedown, be sure to genuinely consider granting some leave in advance for these types of employees - you want to make sure your staff are not significantly disadvantaged during the Christmas break.

And as always, if you have any specific issues in this area or any other, our Advice Service is here to help and can be contacted by email or phone 0800 472 472 (1800 128 086 from Australia).



Published in the 25th November 2019 edition of Talking Shop.


Make sure you are in the know about Public Holidays

It seems that every time a public holiday comes around, there's lot of scratching of heads, wondering what to pay staff and why.

We have formatted a guide specifically for this area, breaking the laws down and providing some working examples to help ease the process. It's FREE for Retail NZ members (or $29 plus GST for non-members).

Get your copy today by emailing advice@retail.kiwi or request it from our member resource library.



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