With over 600,000 jobs lost and over six million people on JobKeeper, the COVID-19 pandemic has had an enormous impact on the Australian economy. As a result, many businesses, small and large, have been faced with tough decisions pertaining to their employees. With businesses across various industries suffering substantial losses in revenue, many employers have opted for stand-downs. Employees across the country have received and continue to receive news that they are being stood down without pay. This has left many workers stressed, anxious and confused.
What are stand-downs?
Firstly, it is crucial to distinguish stand-downs in response to the pandemic from a stand-down that is part of a disciplinary process or an investigation process. When a serious allegation is made against an employee in a workplace, it is common for the employer to stand down the employee with pay while the allegation is investigated. This is not the same as the stand-down action being made by employers across the country as a response to the pandemic.
Is my employer allowed to stand me down?
Yes. Pursuant to section 524(1)(c) of the Fair Work Act 2009, it is within an employer’s rights to stand down an employee without pay if:
- The employee cannot usefully be employed. An employer is required to exhaust all prospects of useful employment, including across different roles in the business, even if those roles fall outside the scope of an employee’s normal duties; and
- The stand-down is because of a stoppage of work for any cause for which the employer cannot reasonably be held liable. A mere loss in turnover is not enough to enliven this provision. The provision requires there to be a stoppage of work. Examples of this may include where the pandemic has led to a significant reduction in operations or a mandatory shutdown of the workplace.
Section 524(1)(c)(2) does not apply in everyday situations where an employer is required to make calculations as to whether an employee’s continued employment is economically beneficial for the business. The provision has previously been applied where businesses have suffered damage as a result of natural disasters. Further, a reverse onus of proof applies. This means that the obligation is on the employer to prove that the above elements have been satisfied.
It’s crucial to note that, if your employment contract already includes stand down provisions, the standards as stipulated in the agreement are to be adhered to. An employer cannot rely on section 524(1)(c) of the Act to override their contractual obligations. Further, an employee’s leave entitlements continue to accrue in the usual way.
Alternatives to stand-downs
Employers are further able to explore alternatives with employees, as stand-downs should be an option of last resort. These alternatives may include mutually agreed reduced hours, use of leave arrangements or redundancies.
It is crucial to note that an employer cannot direct employees to utilise their annual leave or long service leave; however, this option can be discussed with employees who prefer it over the alternative of being stood down without pay.
What if I have been unlawfully stood down?
Employees who have been issued an unlawful stand-down directive can make an application to the Fair Work Commission under section 526 of the Act. These disputes are usually dealt with by way of mediation or conciliation; however, employers may also face penalties in the form of monetary penalties or orders for backpay to an unlawfully stood down employee.
If you require legal advice or representation in relation to stand-downs or in any other legal matter, please contact Go To Court Lawyers.