regular annual closedowns

The method of calculating the annual holiday entitlement is different where the employer chooses to instigate an annual closedown on a regular basis.

This closedown can occur either:

across the entire workplace (for example, where a company closes over the Christmas/New Year period), or
for part of an enterprise (for example, where the factory closes for maintenance while the office, dispatch and sales departments remain open).

The employer may implement such a closure once a year and require employees to take leave during the period of the closedown, even where this requires employees to take leave for which they are not fully reimbursed.

The employer is required to provide employees at least 14 days' advance notice of the closedown.

For employees in their first year of employment, the level of annual holiday pay for the period of the closedown can be established by:

the employer paying the employee 8% of gross earnings to date, or
the employer and employee agreeing to the employee taking annual holidays in advance and being paid even though the leave has not yet accrued - see fact sheet titled Annual holidays - employees who take annual holidays in advance of entitlement.

If you are looking for guidance, call the Department of Labour freephone on 0800 20 90 20 during normal business hours.

For all employees whose work is subject to a regular annual closedown, the employer can nominate a date which will be treated as the date that the closedown begins on and on which the employees become entitled to annual holidays. This date must be reasonably connected to the timing of the regular annual closedown. For example, where there is a Christmas closedown the date could be set at 15 December to ensure that it always comes before the annual closedown commences.

An employer who wants to shut down their operations more than once in any year can do so with the agreement of their employee or employees, but cannot direct them to take annual holidays utilising the above provisions. Nor is the date of entitlement to annual holiday adjusted by a second closedown.

Further information & guidance

We welcome the opportunity to help you further. If you can't find an answer to your question, or you want further clarification, more detailed information or guidance on any matter covered here, please contact us. We value your query and will respond to you as quickly as possible.

Call us free on 0800 20 90 20 or visit our website at www.ers.dol.govt.nz.

The content of this document covers common problems. It will not answer every question and should not be used as a substitute for legislation or legal advice.

The Department of Labour takes no responsibility for the results of any actions taken on the basis of information on this website, or for any errors or omissions.