In an uncertain and daily-changing economic landscape, many employers are currently considering what options are available to them due to the consequences of COVID-19 on their business.
Certain Awards, enterprise agreements and individual employment contracts may contain relevant “stand down” provisions, for both national system employers and State system employers and these documents, may set out specific processes that must be followed and entitlements which are available/unavailable to employees.
For State system employees, unless there are stand down provisions in an Award, an employer may not stand down its employees without pay.
For national system employees, unless an employment contract or an Award provides for a specific type of stand down in particular circumstances, you may only stand down employees in accordance with section 524 of the Fair Work Act 2009 (Cth). This section provides that an employee can only be stood down without pay if:
- An employer cannot usefully employ them (including in any work that is not usually performed by that employee, but falls within their employment contract);
- There is a stoppage of work in part or all of the business; and
- That stoppage of work is one that an employer cannot be reasonably held responsible for.
A clear example of “stoppage of work” is where the government directs that a business or type of business must close and the work of that business cannot be done from another location. It is more difficult to advise at this stage whether, prior to a government directive, there is stoppage of work where business can continue, but not in precisely the same form, and where at least parts of the business may be considered to be suffering a stoppage of work.
The current government directives have resulted in the close of a range of businesses, including libraries, licensed premises, cinemas, personal services (other than hairdressers/barbers and physiotherapists), and gyms. Other businesses have had their business severely curtailed, include real estate agents, restaurants/cafes, wedding and funeral providers, and outdoor personal training. The most up-to-date directives can be found here.
While an employee is on stand down, all types of leave continue to accrue and employees continue to be able to access their personal or bereavement leave. Employees also remain entitled to public holiday pay during that period in the usual way. Any previously booked annual or long service leave should be honoured, but employers are generally not required to agree to an employee booking any additional annual leave during the period of stand down.
How can HHG Legal Group assist?
It is important to get legal advice prior to standing down employees, as a failure to pay employees (without their agreement) during this period may give rise to a claim for breach of the employment contract, unpaid wages, and/or breach of the relevant Award and legislation.
We recommend that employees and employers consider the impact of stand down on any government subsidies that are or may become available. but we also encourage employers to consider the alternatives to stand down which we will cover in our next article.
In the meantime, should you have any queries relating to your staff and their awards, entitlements and stand down/stoppage alternatives, please contact Gemma Wheeler Carver from our Employment Law team on 1800 609 945 or fill in the form on our Contact Page and one of our team members will call you back.