Stand downs: What employers need to know

stand downs

The shutdowns of non-essential services due to coronavirus may trigger conditions in the Fair Work Act that allow staff stand downs without pay, according to Employsure, Australia’s leading workplace relations company.

In the government-imposed closure of a workplace, employers may be in a position to stand staff down without pay if those employees can’t be usefully deployed in other parts of the business.

Ed Mallett, Employsure’s managing director, says employers are grappling with new entitlements that apply since the COVID-19 outbreak. In the past fortnight alone calls to the company’s Employer Advice Line have more than doubled. 

“This is an incredibly confusing time for employers,” he says. 

“The conversation has evolved so drastically in the past few weeks and business owners are finding it hard to keep up. 

“We’ve gone from talking self isolation and remote working to complete workplace shutdowns. And the entitlements that apply in all of these scenarios are incredibly vast and complex.

“Employers are doing their best to meet an unprecedented challenge. There’s a huge amount of pressure on their business, but they’ve also got employees to think about and legal obligations they must fulfil.”

Employsure has launched its six-month Advice and Support Package, an at-cost service giving employers unlimited access to its 24/7 Employer Advice Line, legal protection and peace of mind. Find out more.

What to do if you’re facing a legitimate stoppage of work

Addressing shutdowns specifically, Mallett says recent government announcements may allow employers to access little-known conditions in the Fair Work Act.

“If you are ordered by the government to fully shut down, and your employees can’t reasonably work elsewhere, you may be in a position to stand them down without pay,” say Mallett.

“The employer needs to be able to show that it is a legitimate stoppage of work, not just a downturn. 

“This certainly appears to be a legitimate stoppage for many businesses, meaning that unpaid stand down provisions in the Fair Work Act may well apply given the circumstances.

“The requirements under the Fair Work Act mean that unpaid stand downs apply when an employee cannot usefully be employed. However, an employer must show that they took all steps to find useful employment for the affected employees.

“This doesn’t mean an employer is bound to place employees in drastically different positions to their contracted position or significantly change the way they operate the business.

“However, prior to standing down an employee, you should consider all other alternatives, including whether the employee could work from home or in another location. 

“If this is not possible, discuss the stand down with them and confirm it in writing.

“If you’re an employer and you’re struggling to get the right advice through traditional channels, please reach out to us. We can support you. 

We’ve also built a free online resource hub for employers. This will help you understand and apply your fundamental obligations during this incredibly confusing time.”

Stand downs: The five questions employers must ask

  1. Are there stand down provisions in the Modern Award, Enterprise Agreement or Contract of Employment?
  2. Is the employee on a period of authorised leave (paid or unpaid)? If so, they are not taken to be stood down.
  3. Can you establish causation? Is COVID-19 the real reason for the stoppage of work? Or has the government ordered you to shut down (wholly or partly)? 
  4. Has there actually been a stoppage of work? By definition, this must be more than a downturn. Keep in mind that a stoppage of work does not mean a downturn of work, or an inability to operate without difficulty.
  5. Are there opportunities for the employee to be usefully employed either in another position or working from home?

If you cannot satisfy these requirements, you cannot lawfully stand down your employees. Proceeding with standing down your employees without satisfying these elements will open up your business to an underpayment claim. 

Should this occur, the onus of proof falls on you, the employer, to show the unpaid stand down was legitimate. Fulfil each of the steps outlined above to safeguard your business against underpayment claims.

NOW READ: Coronavirus update for business: JobKeeper for landlords, free childcare support, and investment for coronavirus-busting startups.

Employsure

Australia has one of the most difficult workplace relations systems in the world. Employsure is here to help employers navigate the complexity. Employsure is the largest provider of employment relations and work health and safety services in Australia — servicing more than 24,000 clients nationally. More than 300 advisers and consultants provide independent advice to business owners on their workplace relations and health and safety obligations. Every day Employsure gives business owners the confidence that their workplaces are safe, fair and compliant.

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