When can employees can be stood down without pay?

Employers and employees are encouraged to work together to find appropriate solutions that suit the needs of individual workplaces and staff. Employees who are stood down without pay remain employed for the period of the stand down.

Under the Fair Work Act, an employee can only be stood down without pay if they cannot be usefully employed because of a stoppage of work for any cause for which the employer cannot reasonably be held responsible.

Whether the option of standing down employees is available in circumstances relating to Coronavirus is very fact dependent and an employer should exercise the option cautiously. 

The employer must be able to demonstrate that:

If an employer unlawfully stands down employees without pay, the employees will likely be able to recover unpaid wages.

Employers cannot generally stand down employees simply because of a deterioration of business conditions or because an employee has Coronavirus. 

Some examples of when employers may be able to stand down employees include:

• if there was an enforceable government direction requiring the business to close (which means there is no work at all for the employees to do, even from another location)

• if a large proportion of the workforce was required to self-quarantine with the result that the remaining employees/workforce cannot usefully be employed 

• if there was a stoppage of work due to lack of supply for which the employer could not be held responsible.

This is not an exhaustive list.

Enterprise agreements and employment contracts can have different or extra rules about when an employer can stand down an employee without pay, for example, a requirement to notify or consult. Employers should consider whether their obligations are impacted by any applicable enterprise agreement, award, employees' employment contracts or workplace policies.

Employers are not required to make payments to employees for the period of a stand down but may choose to pay their employees. Employees accrue leave as normal.

An employee is not taken to be stood down during a period when the employee is taking paid or unpaid leave that is authorised by the employer or the employee is otherwise authorised to be absent.

The stand down provisions in the Fair Work Act, enterprise agreements or contracts of employment are not usually relied on for casual employees. 

Other options that an employer may consider instead of stand down include:

• seeking employees' agreement to take paid (or unpaid) leave for a period 

• in limited circumstances, directing employees to take paid annual leave 

• in limited circumstances, negotiating with employees to change regular rosters or hours of work 

• terminating the employment of the employees, in which case the employer may have to provide redundancy pay. 

The Fair Work Act includes requirements that employers have to meet before they can terminate an employee's employment, such as providing notice of termination. An employee is also protected from being dismissed because of discrimination, a reason that is harsh, unjust or unreasonable or another protected right. Employers are prohibited from exerting undue influence or undue pressure on employees in relation to making certain agreements or arrangements.

Update taken from https://coronavirus.fairwork.gov.au/