What is standing down employees?
Under the Fair Work Act 2009 (the Act) an employer can stand an employee down without pay if the employer cannot usefully employ the employee for reasons beyond the employer’s control, as set out below.
Standing down employees under the Fair Work Act 2009
An employer can tell an employee to ‘stand down’ under section 524 of the Fair Work Act 2009 (the Act), if there is no useful work for them to do for reasons beyond the Employer’s control, so in case of a machinery or equipment breakdown, industrial action, or there is a stoppage of work caused by severe and inclement weather, for example. The employee is still employed by the business but does not get paid for the time they are stood down. This is different from unpaid leave, which is usually initiated by the employee and only affects them personally.
An enterprise agreement, award or employment contract may have different or additional provisions that apply, such as consultation or notice requirements.
During the COVID-19 pandemic additional temporary provisions in the Act applied i.e. sections 789GDC (qualifying employers) and 789GJA (legacy employers) that allowed stand down as a part of JobKeeper amendments to the Fair Work Act, which allowed the employer to give enabling directions to the employee if both the employer and employee met certain conditions.
When can you legally stand down employees?
If an employer unlawfully stands down employees without pay, the employer may have to back pay the employees the unpaid wages.
Standing down under section 524 of the Fair Work Act
Employers can’t implement the stand down provisions under the Act simply because there is a downturn in business and they have less work for the employees. Employers can send employees home if work stops for reasons outside their control such as a machinery or equipment breakdown or industrial action, provided it is not organised by the employer, or a stoppage of work for which the employer cannot be held responsible.
For a stoppage of work an employer has to show all of the following:
There is a stoppage of work which occurred before the stand down
The employees to be stood down cannot be usefully employed in their usual or an alternative role because of the stoppage
The cause of the stoppage must be one for which the employer cannot reasonably be held responsible.
A stoppage of work can include severe and inclement weather, where it is unsafe or unreasonable for an employee to work because of severe weather conditions such heavy rain and storms, flooding, bushfires, extreme heat or cold, hail or high winds.
Other examples of when employers may be able to stand down employees provided the employees can’t be usefully employed are related to the COVID-19 pandemic and include enforceable government directions which require the business to close or if the business supply-chain has been interrupted and there are no viable alternatives available.
The employer should take all reasonable steps to usefully employ employees elsewhere. Employees should be given the opportunity to perform any work that is available that they are capable of doing – even if it falls outside their usual duties – before a decision is made to stand them down. Employers will also need to consider options such as working from home or changing the employee’s location of work.
Notice period and payment
Employees should be given as much notice as possible that they are to be stood down, even though the Act does not specify a timeframe. The employer should also provide employees with an estimated duration of the stand down period.
Under JobKeeper amendments to the Fair Work Act, qualifying employers need to notify the employee at least three days prior in writing before giving them the direction to stand down. For legacy employers they should provide at least 7 days’ written notice to an employee and the employer needs to consult with the employee (or their representative) before issuing a JobKeeper enabling stand down direction in writing.
Pay during stand down
During a stand down period, an employee doesn’t need to be paid unless they are receiving JobKeeper. Employees continue to accrue entitlements (e.g. annual leave, sick leave) and as per the hours they ordinarily would have worked if they hadn’t been stood down, whether the stand down is under section 524 of the Act or a JobKeeper enabling direction.
Alternative options to standing down
Standing down should be treated with caution. Employers should explore all alternative options prior to standing the employees down without pay. Employers can offer alternative duties or a different working location, possibly pursuant to a JobKeeper enabling direction if both the employer and employee are eligible. Employers should also look at flexible working arrangements and job-sharing options and allow employees to access their annual leave or long service leave (if applicable) to cover the days where they cannot be usefully employed.
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Frequently Asked Questions
What does standing down mean?
Standing down is when the employer has no useful work for their employees to do for reasons beyond the employer’s control, in which case the employer can tell the employee to stay home without pay as per provisions in the Fair Work Act 2009.
How much notice does an employer need to provide if standing down?
The Act does not specify a timeframe, but employees should be given as much notice as possible.
Under what circumstances can an employer justify standing down an employee?
Employers can tell employees not to work if their employees can’t usefully be employed for reasons outside the employer’s control, for example:
- – An equipment breakdown.
- – Industrial action.
- – A complete stoppage of work because of a government directed shutdown or severe and inclement weather.
What does ‘usefully employed’ mean?
Employees should be given the opportunity to perform any work that is available which they are capable of doing, even if it falls outside their usual duties, before a decision is made to stand them down.
Does stand down affect an employee’s entitlements?
Employees continue to accrue entitlements (e.g. annual leave, sick leave) and as per the ordinary hours they would have worked if they hadn’t been stood down, whether the stand down is under section 524 of the Act or a JobKeeper enabling direction.
An employee who has been stood down or has been given a JobKeeper enabling stand down direction to work less or no hours, is not entitled to use paid sick and carer’s leave for the days or hours that they’ve been directed not to work.
Can the employee look for alternative work if stood down?
No, not without their employer’s permission, as employees are still employed during the stand down period.
What qualifies as a stoppage of work under the Fair Work Act?
A stoppage of work is when the employees have no work to do or are otherwise prevented from performing their work, cannot be usefully employed elsewhere, and the employer cannot reasonably be held responsible.
Examples of a stoppage of work include:
- – An enforceable government direction requiring the business to close.
- – If a large proportion of the workforce is required to self-quarantine and the remaining employees can’t do any useful work.
- – If there is lack of supply for which the employer can’t be held responsible, and the employer can’t find alternatives.
What impact does a stand down have on a public holiday?
If a public holiday falls during a stand down period, employees are entitled to be paid for the hours they normally would have worked on the day the public holiday falls on.
