Customary closedowns

Closedowns during the year

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 this is used for 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 days 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.

Access a template to notify your employees of your business’s annual closedown here.

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 days 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 closedown.

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).

Not a Retail NZ member? With the festive season around the corner, it’s the perfect time to join Retail NZ and make the most of all the benefits, including access to our Advice Service. You’ll be able to get the advice you need to help manage your store, team and public holiday pay during the busiest time of the year — meaning you have more time supporting your business over the coming months. Click here to learn more about joining our supportive Retail NZ community.

Updated February 2024.

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