Coronavirus or COVID-19, has changed the way in which most of us do work, including working from home and/or implementing social distancing practices within the workplace. The way in which services are delivered have also changed, whether it be an increased demand in online shopping or changing from dining-in to take-away offerings or limitations on the number of patrons in a premise. For some businesses and employees, these changes have resulted in a reduction of work or changing the way which work is performed.
What is a stand down?
Section 524 of the Fair Work Act 2009 (Cth), provides for circumstances where a national system employer may stand down an employee.
A stand down occurs under s 524 of the Fair Work Act where an employee cannot be usefully employed because of the following reasons:
- industrial action (other than industrial action organised or engaged in by the employer);
- a breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown;
- a stoppage of work for any cause for which the employer cannot reasonably be held responsible, for example natural disasters including bushfires, floods or cyclone and inclement weather.
Coronavirus Related Stand Down
There may be an ability to stand down employees under s 524 of the Fair Work Act due to Coronavirus on the basis that a stoppage of work has occurred for which an employer cannot be held responsible. For example, due to government restrictions requiring certain businesses such as beauty services to close. It is likely however that a slowing down of work would not be enough to enliven these provisions of the Fair Work Act.
However, an employer may be able to stand down employees due to a reduction in work due to Coronavirus or the government initiatives to slow the transmission of Coronavirus under the jobkeeper enabling provisions of the Fair Work Act.
Jobkeeper Stand down Direction
Where an employer is a jobkeeper eligible employer, that employer may give an employee a jobkeeper enabling stand down direction under s 789GDC of the Fair Work Act.
An employer can stand down an employee under the jobkeeper enabling provisions where that employee cannot be usefully employed for their usual days or hours because of changes to business attributable to Coronavirus or the government initiatives to slow the transmission of Coronavirus.
What happens to Employee Entitlements and Period of Service?
Employee will remain employed during a period of stand down and will continue to accrue their entitlements.
Section 525 of the Fair Work Act provides that an employee may take either paid or unpaid leave, however if this occurs, the employee will not be considered to be stood for this period.
Any requests for leave, whether it be annual leave or personal/carers leave will still need to be approved in the usual way. Employers may be able to direct their employees to take annual leave provided such a request is reasonable and allows them to maintain a minimum annual leave balance provided for by any award, contract or enterprise agreement.
Where the stand down is a jobkeeper related stand down, the employee must be left with a balance of at least 2 weeks annual leave. Under the jobkeeper scheme, an employee and employer may also agree for the employee to take leave at half pay.
Alternatives to Stand down
If you are a jobkeeper eligible employer, you may direct your employees to perform other duties, provided that such duties are safe, within the employee’s skill and competency (including that the employee has the relevant licence/qualification to perform such work), and are reasonably within the scope of the employer’s business operations, under s 789GE of the Fair Work Act.
Alternatively, an employer and employee may agree for an employee to work lesser hours or on reduced pay. It is important that this is agreed by the employee as an employer may otherwise risk an employee claiming that the employer has breached their contract. In addition, where an employee is covered by an award/enterprise agreement, the employer must ensure that any reduction in pay is in line with the minimum rates under the award.
Employees will also be entitled to access their leave entitlements, and employers may consider redundancy options.