Have you been lawfully stood down?

by Mia Formichella

The disruption to employment conditions this year has been one of the greatest felt impacts of the COVID-19 pandemic.  When non-essential workers have been called to cease working at various points throughout the year, and businesses forced to close their doors indefinitely, there has been an influx in the number of individuals being ‘stood down’ by their respective employers.  With large numbers of employers taking action to stand down employees, it is important that employers follow the correct procedures in doing so, or to otherwise risk facing potential claims from affected employees.


When can I be stood down?


An employer can stand down an employee without pay if certain conditions are met.  Specifically, an employee can be stood down in the following circumstances:


  1. Pursuant to the terms of an employee’s employment agreement; or
  2. Pursuant to the provisions of the Fair Work Act 2009 (Cth) (FWA).

Employment Agreement


If an employee’s employment agreement or enterprise agreement makes provision for a stand down, the terms of that agreement will determine the circumstances in which an employee may be stood down.  The terms of the agreement will need to be applied to enforce a period of stand down in circumstances where an employee cannot usefully be employed in the business.  If such an agreement applies, it may also impose additional requirements to be satisfied prior to the commencement of a period of stand down.


Fair Work Act 2009 (Cth)


If an agreement is not in place, an employer will need to rely on the provisions contained in the FWA to stand down an employee.  Section 524(1) of the FWA provides that an employee can be stood down in circumstances where they cannot be usefully employed in the business due to either:


(a) industrial action; or

(b) a breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown; or

(c) a stoppage of work for any cause for which the employer cannot reasonably be held responsible.


In order to stand down an employee, an employer must be able to demonstrate that there has been both a stoppage of work, and that the employee cannot be usefully employed somewhere else in the business.


As such, prior to standing down an employee under paragraph (c) above, an employer must try to find suitable work in the business that the employee could reasonably be expected to perform, with consideration of their skills and competency, even where the employee is requested to perform duties that are different to their usual duties.  If it is possible for an employer to obtain some benefit or value from an employee’s work in the business, they may be found to be ‘usefully employed’ and therefore cannot be lawfully stood down.  Furthermore, where it is possible for an employee to perform their regular duties remotely, an employer is obliged to take this into consideration.


It is important to note, that the deterioration of business conditions alone will not be lawful grounds to stand down an employee.


Paying employees during a period of stand down


An employer is not required to make payments to an employee that has been stood down.  However, during a period of stand down, an employee will continue to accrue leave in the ordinary way.


Pursuant to section 525 of the FWA, an employee will not be taken to be stood down under section 524(1) if the stand down occurs during a period in which the employee is taking paid or unpaid leave that is authorised by the employer, or where the employee is otherwise authorised to be absent from his or her employment.  Accordingly, an employee may take paid or unpaid leave during a period when they would otherwise be stood down.


Furthermore, an employer does not have to pay an employee when either the Federal Government, or a state or territory government make an enforceable government direction that prevents an employee from working.  For example, this may occur where:


(a) an employee is required to self-isolate;

(b) an employee is unable to work remotely; or

(c) an employee’s job site is closed.


Fair Work Act JobKeeper provisions


The FWA has been amended to accommodate the introduction of the JobKeeper payment and to provide certain directions that can be made by employers with respect to JobKeeper.  For these provisions to apply, the employer needs to be enrolled in JobKeeper.  These amendments currently have an expiry date of 28 March 2021.


Specifically, as amended by the Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020, section 789GDC of the FWA allows an employer to make a JobKeeper enabling stand down direction.  This empowers the employer to give the following directions to employees:


(a) not to work on days where the employee usually would;

(b) to work for less hours on any day; or

(c) to work a reduced number of hours, or no hours at all.


Similar to the stand down requirements under section 524(1) of the FWA, the direction under section 789GDC can only be given if the employee cannot be usefully employed for their usual days or hours as a result of changes to business attributable to the COVID-19 pandemic.


During a JobKeeper enabling stand down direction, the employer must comply with the requirements set out in the FWA (as amended) when making JobKeeper payments available to employees.  Other than making such JobKeeper payments, the employer is not required to make payments to the employee during a JobKeeper enabling stand down period.


As with the ordinary stand down provisions in section 524(1) of the FWA, a JobKeeper enabling stand down direction does not apply where an employee is taking paid or unpaid leave that is authorised by the employer, or where the employee is otherwise authorised to be absent from the employee’s employment.


Making a claim


For current employees who have been stood down, the Fair Work Commission has provided a mechanism for employers and employees to resolve a stand down dispute.  Employees may also be entitled to claim unpaid wages for a period in which they have been unlawfully stood down.


If you believe you have been affected by an unlawful stand down, get in touch to consider your options.

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