An annual close-down refers to a period where an employer temporarily shuts down operations or discontinues work for one or more employees, requiring them to take all or part of their annual holidays.
In New Zealand, close-downs are most common during the Christmas/New Year period, but do not have to be at this time of year. Close-downs also do not have to be for all employees, for example - an employer may decide to only partially close its operations, but keep other areas of its business running during the close-down period.
Under the Holidays Act 2003, an employer can only have
one customary close-down per year whereby it can require employees to take their annual leave.
Employers must provide staff with a
minimum of 14 days' written notice before initiating a close-down and requiring the taking of annual leave by employees. Employees can be required to take annual holidays during a close-down regardless of their agreement. There is no statutory limit on the length of a close-down - It is at the employer’s discretion, but typically close-downs are two or three weeks over the Christmas period.
If a public holiday occurs within the close-down period and it falls on a day the employee would have usually worked, then the day is treated as a paid public holiday - rather than being deducted from their annual leave entitlement. There are four public holidays over the upcoming Christmas & New Year period: Christmas Day (Wednesday, 25th Dec 2024), Boxing Day (Thursday, 26th Dec 2024), New Years Day (Wednesday, 1st Jan 2025) and Thursday, 2nd January 2025.
Employers may only impose
one close-down period per employee
per year, though different parts of the business may have separate close-downs at different times. By implementing a close-down period, employers can ensure that employees take a portion of their annual leave at a time that aligns with business needs and also have the opportunity for some rest.
If you need a letter announcing your annual close-down there's a template in the
Library of your Employers Toolbox.