Hotel worker stood down for refusing reduced hours during COVID

What happened

Kiah Shanks worked full time at a hotel on the Gold Coast, on a rotating roster of eight-hour shifts, five days a week. Her job was at the front desk: checking guests in and out, answering calls and emails, taking payments, and managing bookings and room allocations.

Between 1 and 8 August 2021 a Public Health Order put non-essential activities into lockdown. The hotel kept running on a skeleton staff, and Ms Shanks was treated as an essential worker for the first two days. On 3 August the hotel rang to tell her she was stood down without pay until the lockdown ended. Letters then extended the stand down to 13 August.

The hotel reopened, but business was very slow. It wrote to its staff on 11, 18 and 19 August asking each of them to sign an agreement temporarily reducing their hours. Ms Shanks did not agree, so she did not reply, and assumed she would be rostered as normal. On 25 August her supervisor rang her. On Ms Shanks' account, the supervisor passed on the manager's message that unless she signed the variation she could not be rostered. A letter on 26 August extended her stand down to 6 September, and another on 31 August said that, because she had not accepted the reduced hours, she would stay stood down until 19 September. She went back to work on 8 September.

The claim

Ms Shanks accepted she had been validly stood down during the lockdown and until the hotel reopened on 13 August. She challenged two later periods: 13 to 16 August, and 26 August to 8 September. In those periods, she said, the hotel was open, guests were checking in, and the rosters always had someone doing her role. She had worked in five departments over five years and could have been given other work. She said casual staff were offered shifts she could have done, and she asked to be paid for the lost time.

The hotel's evidence was that it ran at about 10% capacity in August and below 38% in September and October, that JobKeeper was no longer available, and that it was losing money. Every employee but two had agreed to reduced hours, so the limited work could be shared. Casuals were used only when permanent staff could not cover the hours, and Ms Shanks had not taken up the invitations to contact HR until late.

Why: the legal test

A stand down is when an employer stops giving a worker work, and stops paying them, without ending the job. Under s 524 of the Fair Work Act 2009 (Cth), an employer may do this only for a period in which the employee "cannot usefully be employed" because of industrial action, a breakdown of machinery the employer is not responsible for, or a "stoppage of work" for a cause the employer is not responsible for. Under s 526 the Commission can deal with a dispute about a stand down, and it must take into account fairness between the parties.

Deputy President Lake held that a stoppage means work actually ceasing. A mere reduction in available work is not enough; reading it otherwise could deprive employees of their basic entitlement to work. The hotel conceded it was operating from mid-August, so in both disputed periods there was no genuine stoppage. The stand downs were not authorised by the Act.

What the Commission decided

That did not mean Ms Shanks would be paid. Following the Full Bench in Carter v Auto Parts Group Pty Ltd [2021] FWCFB 1015, the Commission can make a money order to resolve a stand down dispute, but only after weighing fairness, the employer's business circumstances, the worker's loss and what she did to reduce it.

The Deputy President had "considerable sympathy" for the hotel, which had tried to treat all its staff fairly. The Deputy President accepted that losing a full-time income would have been stressful. But the Deputy President found that refusing reduced hours and then seeking the pay she would have received "seems out of touch with the realities of the industry in which she works". Retraining her for housekeeping, or even giving her full hours at reception, would have taken hours away from colleagues. Ordering payment would not be fair to the hotel or to the approximately 268 other staff who agreed to share the burden, so the Commission declined to make any monetary order.

What this means for you

If your employer stands you down while the business is still trading, it is worth knowing that a downturn alone does not give it that power. A cut to your hours is a change to your employment that generally needs your agreement or a term of your contract, award or agreement that allows it.

But the case shows that being right about the law is not the end of it. Before refusing a reasonable, temporary arrangement that everyone else has accepted, consider how the Commission is likely to weigh fairness. Reply to your employer in writing, ask what work is available, and get advice early.