Under the Fair Work Act 2009 (the Act) an employer can stand an employee down without pay if the employer cannot usefully employ the employee for reasons beyond the employer’s control, as set out below.
Standing down employees under the Fair Work Act 2009
Under section 524 of the Fair Work Act 2009, an employer can tell an employee to ‘stand down’ during a period in which the employee cannot usefully be employed because of a number of circumstances including:
- industrial action (other than industrial action organised or engaged by in the employer)
- a breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown, or
- a stoppage of work for any cause for which the employer cannot reasonably be held responsible. This can be due to lack of supply, a natural disaster, or the business has closed because of an enforceable government direction.
Employers can't stand an employee down just because the business is quiet or there isn't enough work. This is different from unpaid leave, which is usually initiated by the employee and only affects them personally.
An enterprise agreement, award or employment contract may have different or additional provisions that apply, such as consultation or notice requirements.
During the COVID-19 pandemic additional temporary provisions in the Act applied i.e. sections 789GDC (qualifying employers) and 789GJA (legacy employers) that allowed stand down as a part of JobKeeper amendments to the Fair Work Act, which allowed the employer to give enabling directions to the employee if both the employer and employee met certain conditions.
When can you legally stand down employees?
Employers may be able to stand down employees:
- under an award, enterprise agreement or employment contract, or
- under the general Fair Work Act provisions
If an employer unlawfully stands down employees without pay, the employer may have to back pay the employees the unpaid wages.
Things to remember before standing down employees
Employers can’t implement the stand down provisions under the Act simply because there is a downturn in business and they have less work for the employees. They should consider all options before making the decision to stand down employees.
Some alternatives that employers can consider include:
- alternative working arrangements such as working from home
- temporarily changing duties, rosters or hours if it means the employee can keep working
- offering accrued annual leave to the employee
- offering other paid leave such as long service leave or paid leave available under an award, enterprise agreement or employment contract
- offering other paid leave by agreement
An employee accessing paid annual leave or long service leave during a stand down won't be considered stood down while on leave.
Informing the employees
If an employer does stand down employees under the Fair Work Act, it's best practice to tell those employees in writing (where possible), including:
- the start date of the stand down
- whether the employees will or will not be paid
- the effect on other employment entitlements
Employers should also try to update employees about when they think the stand down will end.
Pay during stand down
During a stand down period, an employee doesn’t need to be paid. However, they accrue leave based on their normal hours had they been working. Employers also need to pay employees for any public holidays that fall during the period.
Using leave during stand down
Employees can agree with their employer to use certain types of paid leave during a stand down. This can include paid annual leave, long service leave, paid leave under an applicable award, enterprise agreement or employment contract. Employees who are stood down without pay under the Fair Work Act can't use paid sick and carer's leave or compassionate leave during the stand down.
Time away from work due to a stand down will count towards an employee's service. Time stood down is included when calculating an employee's entitlements under the National Employment Standards (NES) including notice, redundancy, and leave.