End of Year Leave and Shutdown Periods: What Real Estate Employers and Employees Need to Know
O*NO! As a real estate agency, the holiday season can be a tricky time to manage. Whether you’re staying open with a jam-packed schedule or winding down for a holiday shutdown, getting your staff’s leave and shutdown periods right is crucial. Mistakes here can lead to penalties, fines, or even legal disputes—things you definitely don’t want to deal with in what should be a quieter time of year.
This blog will walk you through planning for the end-of-year shutdown period, your legal obligations under the Real Estate Industry Award, a refresher on annual leave and the right to disconnect.
Why It’s Important to Reduce Leave Balances in the Holiday Season
The holiday season offers the perfect opportunity for employees to take a well-deserved break, while also allowing businesses to manage leave balances effectively. When employees build up large balances of accrued leave, it can create challenges for agencies later. Encouraging leave over the holiday season has multiple benefits for real estate agencies – Here’s why:
Reduce Financial Liability: High leave balances build up as a financial liability. Clearing some of these balances helps keep your agency’s finances healthier, which can make a massive difference when it comes to selling your agency.
Prevent Future Disruptions: When employees take time off later in the year, it can disrupt operations. Encouraging holiday leave now helps you manage schedules and keep client service smooth.
Boost Team Well-being: The holiday break allows employees to recharge. A rested team returns with more energy and focus, which benefits everyone.
Support Positive Culture: Promoting time off shows employees you value their well-being, which strengthens team morale and retention.
Simplify Payroll: Fewer large leave balances mean easier payroll management, making administration simpler for everyone.
If your business needs to shut down during the holiday period, you may require your employees to take annual leave. This is allowed under the right conditions, depending on whether you are governed by an award or a registered agreement.
The Rules in the Real Estate Industry Award
If your agency or business is covered by the Real Estate Industry Award 2020, there are specific rules regarding the closure of business operations and the use of annual leave during shutdowns.
According to Clause 20.5 of the Award, employers can require employees to take annual leave during a shutdown, but there are certain conditions to keep in mind:
Written Notice: Employers must provide 28 days' written notice to employees about a shutdown period, unless a shorter notice period is agreed upon.
Direction to Take Leave: If an employee has accrued enough paid leave, the employer may direct them to take it during the shutdown, and the employee is obligated to comply with this direction.
Reasonable Direction: Any direction to take annual leave must be reasonable and in writing.
What happens if I don’t have annual leave to cover the shutdown?
As a refresher, annual leave is the time an employee is entitled to take off from work while still being paid. The National Employment Standards (NES) state that full-time employees are entitled to a minimum of four weeks of paid annual leave per year, with part-time employees receiving a pro-rated entitlement. This leave accrues from the moment an employee starts work, even during their probation period.
If employees don’t have enough annual leave accrued to cover the shutdown, the Award allows the possibility for them to take annual leave in advance. This requires a formal agreement between the employer and employee, making it a flexible solution for both parties while ensuring compliance with Award requirements. Here’s how it works:
Written Agreement: Both employer and employee need to agree in writing for the employee to take a period of paid annual leave before it's been fully accrued. This helps cover the shutdown period without requiring unpaid leave or creating a payroll gap.
Agreement Details: The agreement should specify:
The amount of leave being taken in advance.
The exact date when the leave will commence.
Both parties’ signatures. If the employee is under 18, their parent or guardian must also sign.
Copy of Agreement: Employers are required to keep a copy of this agreement as an official employee record, so it’s easy to refer back to if questions arise later.
Also, If the employee leaves the business before accruing the full amount of leave taken in advance, the employer is permitted to deduct the equivalent amount from their final wage. This deduction is equal to the unaccrued portion of the leave, ensuring that the business isn’t financially impacted by leave taken in advance.
The employee and employer can also mutually agree to take unpaid leave during the shutdown period.
The Right to Disconnect During the Shutdown Period
With a greater focus on work-life balance, the holiday season is also a good time to review your approach to after-hours communication. Many employees now have a legal right to "unplug" during non-working hours—and this is especially relevant when the business itself is on break.
During a shutdown, employees should feel free to truly disconnect, knowing there’s no expectation to monitor emails or calls unless it’s an exceptional situation. This right to disconnect is valuable for both employees and the agency: it allows your team to take a proper break and return refreshed, and it supports a healthier work-life balance overall.
To set up clear expectations around disconnecting, you might:
Discuss Out-of-Hours Contact: Before the shutdown begins, clarify if there are any situations, or times, where an employee might need to be reached.
Establish Preferred Channels: If emergency contact is needed, agree on a primary method (like a phone call) so employees don’t feel they need to monitor multiple channels.
Set Boundaries for Disconnecting: Confirm that, outside of emergencies, employees are not expected to read or respond to messages during the shutdown.
However, there are some exceptions to this under the Award –
Stand-by Exceptions: The right to disconnect doesn’t prevent an employer from requiring contact if an employee is on “stand-by.” If an employee is being compensated for stand-by time under clause 19.3 of the Award, an employer can reach out to notify the employee of required work or provide updates relevant to their stand-by status.
Stand-by and Call-out Compensation: For property or strata managers who might be on stand-by, employers must establish a written agreement on a method of payment for any stand-by or call-out time. This could be a separate stand-by rate, or if an employee’s salary is above the minimum wage, it can include a stand-by component, as long as this is clearly identified in the salary agreement.
The agreement made for this must be reasonable when considering the extent to which the employee is required to be on stand-by and/or call-out.
Key Takeaways
Ensure you’re aware of the specific rules for annual leave during a shutdown, as outlined in the Real Estate Industry Award (eg. 28 day notice period), to avoid penalties and maintain compliance.
Encouraging employees to take leave during the holiday season helps lower accrued leave liabilities and keeps your team refreshed for the new year.
Employees have the right to disconnect during a shutdown, but stand-by and call-out duties require a clear, written agreement on compensation.
For stand-by or call-out duties, written agreements protect both employer and employee rights and clarify whether stand-by hours count toward ordinary time.
YOUR NEXT STEPS
Navigating holiday shutdowns, employee entitlements, and different employment agreements can be complex, but you don’t have to go it alone. Our team of real estate agency lawyers can help you keep your agency protected!
Boring legal stuff: This article is general information only and cannot be regarded as legal, financial or accounting advice as it does not take into account your personal circumstances. For tailored advice, please contact us. PS - congratulations if you have read this far, you must love legal disclaimers or are a sucker for punishment.