Employers directly affected by the bushfires should consider standing down their employees before shutting down business completely, Fairwork Australia says.
According to Athena Koelmeyer, managing director of Workplace Law, while the option to stand down employees in response to a disaster may seem harsh, it is “one of the few things that can provide employers in difficult circumstances a bit of relief, in circumstances where there has to be a stoppage of work where the employer can’t be reasonably held responsible”.
Although the policy is usually reserved for situations such as industrial strikes, there is a provision for natural disasters.
As it stands, the Australian bushfires have destroyed homes and buildings, while major roads are closed off and towns have been evacuated for safety. Some facilities and machinery crucial to business have also been damaged. For example, in Cabramurra, the operational town of Snowy Hydro 2.0, more than half the homes have reportedly been lost, and machinery damaged.
Only locations that are directly affected or in danger have the option to stand down employees. So, SMEs experiencing less business because of the fallout should not consider that legal justification to send workers home, Koelmeyer says.
“Business being slow is one thing, but if you are in a critically bushfire-affected area … that is the sort of genuine emergency situation that you’ll be able to use the stand down provision in,” she says.
This includes businesses in major cities suffering from air pollution, and many east coast towns, where the Australian Tourism Industry Council and the Insurance Council of Australia estimate losses to be in the hundreds of millions.
Fairwork also warns employers to check their obligations to their employees on a case-by-case basis before initiating a stand down.
What does it mean to stand down an employee?
Whereas a shut down is a scheduled temporary closure during predicted slow periods of business, individual contracted employees can be stood down, which sometimes allow employees to continue accruing leave even if they cannot be paid during this period.
Stand downs occur when useful work is unavailable because of circumstances outside the employer’s control. According to the Fairwork guide, inclement weather and natural disasters are eligible reasons for standing employees down.
How do I stand down an employee?
“The first thing to do is check is whether or not you’re relying on the provisions in section 524 of the [Fair work] Act,” Koelmeyer says, “or whether you have an enterprise agreement or, for some reason, you have a contract of employment that has different stand down provisions.”
If you have specific and explicit stand down provisions, it’s important to comply with those agreements. In the absence of different provisions, you should follow Fairwork’s stand down Act, Koelmeyer says.
For example, some awards require employers to continue paying the employees during a stand down, while some agreements say employers must explore options of transferring employees to safer work sites or allowing them to work from home. Casual employees are not usually eligible and must work their minimum engagement period.
“Communication will be key to making sure this difficult situation runs as smoothly as possible,” Koelmeyer says.
Fairwork encourages employers to notify their employees in writing, including details such as the starting date of the stand down and, if possible, an estimated end date. Employers should also list out any changes to the salary and other entitlements in this letter.
Koelmeyer encourages businesses to use “some of the wording from the section” when explaining why the decision has been made.
She also advises businesses to decide on an accessible communication strategy before the stand down goes ahead. It’s important to keep in contact with employees during a stand down, especially during a natural disaster, but the bushfires may impede normal forms of communication such as email.
Once the stand down ends and it is safe for workers to return, it should be business as usual, Koelmeyer says. As far as possible, at least.
“Given that stand downs are unpaid, certainly in my experience, employees are generally pretty keen to come back or to start taking paid leave,” she says.
“If you’re in a situation where your employee has lost everything, you’ve got to take a compassionate stance, especially if you can afford to.”
If employers have any questions, the Fairwork Ombudsman is a free first call. Otherwise, industry associations and employment lawyers are also options.
What types of leave are employees entitled to?
Employers can also encourage employees to take accrued leave during this period. In some cases, employers can even require employees to take this period as accrued leave.
Otherwise, to keep the business running, they can make remote working arrangements.
Employees are still entitled to take personal and carer’s leave during this period, especially if homes, schools and childcare centres are affected by the fires. At least two days of paid compassionate leave should also be available for those who lose a family member.
Some employees may wish, or be requested, to assist with volunteer disaster relief activities, especially if they are a member of an emergency organisation such as the State Emergency Service (SES).
Employers should check the award agreement volunteering employees are contracted under, but some employees may be eligible for community service leave.
Those wishing to volunteer under community service leave should notify their employers as soon as possible, and be able to provide evidence of their activities.
Can I temporarily close down?
Yes, especially if you and your business are located in a danger zone.
Before closing down for a period of time, be sure to check every employee’s entitlements under natural disasters and emergencies. Common choices are covered above: either employees take accrued leave, are stood down, or if they are casual workers, they are typically ineligible for either.
You can help keep SmartCompany free for everyone to read
Small and medium businesses and startups have never needed credible, independent journalism and information more than now.
That’s our job at SmartCompany: to keep you informed with the news, interviews and analysis you need to manage your way through this unprecedented crisis.
Now, there’s a way you can help us keep doing this: by becoming a SmartCompany Supporter.
Even a small contribution will help us to keep doing the journalism that keeps Australia’s entrepreneurs informed.
And it’s not all one-way traffic either. SmartCompany Super Supporters get to dial into our monthly editor’s meeting and attend a monthly, invite-only webinar with a big-name entrepreneur.