‘Tis The Season To Understand Company Shutdown Periods

The holiday season is a time of joy, celebration, and, for many, a much-needed break. It’s a period of relaxation, family gatherings, and festive cheer. However, for many employees, the holiday season can also bring uncertainty, especially when their company decides to shut down operations for a period.

 

A company shutdown can disrupt work routines, affect leave entitlements, and raise questions about pay and benefits. Understanding your rights and the reasons behind a company shutdown is vital to making it through this period smoothly. So, what happens when your company decides to shut down for the holidays?

 

Understanding company shutdowns

A company shutdown is a planned period when a business temporarily closes. This often occurs during the festive season, especially around Christmas and New Year. During this time, operations are halted, and employees may need to take forced leave.

 

Why do companies often choose to shut down during these periods?

Company shutdowns during the holidays are quite common. There are a few reasons why companies might choose to do this.

 

Firstly, it’s a great way to accommodate employees’ holiday plans. Many people take time off to celebrate with loved ones, so a company shutdown makes sense. Secondly, many businesses experience a slowdown during this time as customers also take vacations. It’s more efficient to close than to operate at a reduced capacity.

 

Plus, a shutdown can save the company money on costs like electricity and staff expenses. It also gives employees a much-needed break, which can boost morale and productivity. Lastly, this shutdown period is the perfect time for maintenance and upgrades to take place, without disrupting regular operations.

 

Know your rights and responsibilities as an employee – how a shutdown affects your annual leave

As an employee, you are entitled to annual leave in terms of the Basic Conditions of Employment Act, if you work for 24 hours or more in a month. An employee is entitled to 21 consecutive days of annual leave with their salary paid in full (the 21 days include non-working days such as weekends).

 

If an employee works for five days a week they will receive 15 days of paid leave. If they work six days a week they will receive 18 days.

 

This means that an employee receives 1.25 days per month if they work five days a week or 1.5 days per month if they work six days a week.

 

If public holidays fall within the shutdown period, you’re entitled to additional leave. However, you will only be paid for the days you would normally work during your leave period. It is important to note that overtime work during holidays is only allowed by agreement. If you agree, you must be paid double time or given a day off in lieu of terms of section 18 of the Basic Conditions of Employment Act.

 

Every employer must have an annual leave policy in place. If an employer has an annual shutdown period, such as over December, the employer should warn employees of this and stipulate this in the employment contract. Employees must also be informed that if they do not have sufficient annual leave to cover the shutdown period, then the difference will be treated as unpaid leave. As such, it is your responsibility as an employee to ensure you have sufficient leave days to cover the full annual shutdown period.

 

Bonuses – a matter of contract and practice

While there’s no legal obligation for employers to pay bonuses in labour law, it’s a common practice in many industries.

 

Bonuses are also paid if they’re part of your contractual agreement, where your employment contract explicitly outlines the terms and conditions for bonus payments, such as performance criteria or company profitability.

 

What happens if bonuses aren’t paid? If your employer fails to pay a bonus that you’ve come to expect, it could be considered an unfair labour practice. This could be grounds for legal action.

 

• Ensure that employment contracts clearly outline the terms and conditions for bonus payments.
• Employers must inform employees in advance if there’s a possibility of reduced or no bonus payments.

 

A word of caution

It’s important to consult your employment contract and company policies to understand the specific terms and conditions related to shutdowns, leave entitlements, and bonuses. By understanding your leave entitlements and how they apply to company shutdowns, you can better plan your time off and ensure you’re treated fairly.

 

If you have any questions or concerns about your rights during a company shutdown, don’t hesitate to seek expert advice. Contact a labour union representative or one of our experienced Attorneys at Hammond Pole. We’re here to protect your rights and ensure a fair outcome.

 

Blog By: Carla de Waal
Carla de Waal: CarlaDW@hammondpole.co.za