If your workplace shuts down over the Christmas break, your employer can usually require you to use your annual leave for it, even if you would rather save it for something else.
Employment New Zealand, part of the Ministry of Business, Innovation and Employment, calls this an annual closedown. The rules sit in the Holidays Act 2003, which still applies until it is replaced in August 2028.
What counts as an annual closedown?
Employment New Zealand describes it as a workplace closing each year, often for a holiday or seasonal break, with employees required to take time off. It can cover a whole business, part of a business (for example a factory closing for maintenance while the office stays open), or different parts at different times.
It also counts when the workplace stays open but the employer stops work for some staff, such as a customer service centre running with fewer people between Christmas and New Year.
An employer can have only one annual closedown in any 12-month period, and must give at least 14 days' notice before it starts. For a closedown starting on Thursday 24 December, that means telling staff by around 10 December.
I have leave saved up. Do I have to use it?
Yes, as long as you were given 14 days' notice. Employment New Zealand says an employee with annual holidays available at the start of the closedown "must" use them, paid in the usual way.
Employment lawyer Aishleen Sluiters of Edwards Sluiters told RNZ that employees can raise concerns, "but they cannot simply opt out of a lawful annual closedown because they would rather take leave at another time".
That matters if you were planning a long trip home later in the year. Sluiters said employees can ask to keep their leave for a later trip, but the employer does not have to agree. Her advice was to raise both the closedown and the trip with your employer before making non-refundable bookings.
What if I don't have enough leave to cover it?
Employment New Zealand lists the options:
- Your employer can choose to let you take annual leave in advance.
- You and your employer can agree that you use other leave, such as alternative holidays (days in lieu), or take leave without pay.
Sluiters told RNZ there is "no automatic hardship exemption". Being short of money does not, on its own, give you a right to keep working or to extra paid leave.
I started this year. What happens to me?
New employees are not entitled to the four weeks of annual holidays until they have worked 12 months continuously. If you are not yet entitled when the closedown starts, Employment New Zealand says your employer must:
- Pay you 8% of your gross earnings from the start of your employment up to the closedown, minus anything already paid as pay-as-you-go holiday pay or leave in advance.
- Move your anniversary date for annual holidays to the start of the closedown, or a nearby date the employer chooses. Your next four weeks then come 12 months from that date.
You are not otherwise paid for the closedown period, although you can agree with your employer to take some leave in advance on top of the 8% payment.
Do public holidays come out of my leave?
No. Public holidays that fall on days you would normally work must be paid separately, even during a closedown and even if you are on unpaid leave for the rest of it. The same applies to sick leave, bereavement leave and family violence leave taken during the closedown.
This year Christmas Day is on Friday 25 December and New Year's Day on Friday 1 January. Boxing Day and the day after New Year's Day fall on Saturdays, so whether they move to the following Mondays depends on whether you normally work Saturdays. Our earlier article explains public holiday pay over Christmas, including those Monday dates.
What if my employer gets it wrong?
Sluiters told RNZ an employee could challenge being made to take leave if the employer didn't give proper notice, ignored a more generous employment agreement, or used the closedown rules for a shutdown that doesn't qualify. She suggested checking your employment agreement first and raising it with your employer. Where minimum entitlements have been breached, a Labour Inspector or the Employment Relations Authority may be able to help.
Will any of this change?
Yes, but not until 6 August 2028, when the Employment Leave Act replaces the Holidays Act. RNZ reports employers will then have to give 21 days' written notice of an annual closedown, and annual leave will start building from the first day of a job rather than after 12 months. Until then, the current rules apply.
