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Employer obligations when work cannot be carried out

Employer obligations when work cannot be carried out (Last Updated On: August 9, 2016)

As a business owner or employer, there may come a time when you need to stand down employees without pay, for reasons outside your control, and at times, also outside the employees’ control.

The exact description of a stand down is when a certain circumstance allows an employer to ask employees to go home, or not attend work for a period of time when they cannot be utilised in the workplace. This is not to be confused with a shut down, which is the decision to close your business temporarily over slow periods such as Christmas and New Year.

Please note, certain Awards and agreements may also have their own stand down provisions. Ensure you check your Award or agreement and if the stand down provision does not apply, you may be obliged to pay an employee, even if they are not working.

What constitutes a stand down

Generally, employers do not have control over the reasons for work shortage in relation to:

  • industrial action (unless the employer organised or is involved in the industrial action)
  • when machinery or equipment has broken down and the employer cannot reasonably be held responsible for the breakdown
  • during severe weather or a natural disaster, causing work to stop

Please note, Christmas and New Year shut down is generally not a decision beyond an employer’s control.

Alternatives during stand downs

There are some alternatives to consider, where appropriate, when faced with a shut down. Considering these can help reduce the potential effects on an employee and include:

  • the option to take a portion of paid leave
  • potential to share hours and workload
  • reduction of working hours each day
  • flexible arrangements, such as working from home

Payments and accruals

If an employee is stood down, employers are not required to make payments to the employee for the period of stand down, unless the employee is covered by an Award, agreement or contract that states otherwise.

If an employee is stood down, the employee’s leave (annual leave, personal leave, etc) must continue to accrue.

Disputes

If there is a dispute about a stand down under the Fair Work Act, an application can be made to Fair Work Australia to deal with the dispute.

 

Shut downs need to be managed carefully to ensure the reason is justified, you as the employer is acting in-line with the relevant Award or agreements and that options are fairly considered. Employsure’s specialised team is on hand to guide and assist in any circumstance, including stand downs and shut downs. Call us today on 1300 651 415.

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