How to stand down your employees when circumstances go beyond your control?
The Federal Government has already directed restaurants, cafes and pubs to shut down some of their services to slow the spread of the Coronavirus.
Employees have lost their jobs. Some employees are on stand down.
The government is providing income support payments (Jobseeker and the Coronavirus supplement) for people who have lost their jobs and who are on stand down from their employment during these tough times.
Are you considering standing down some of your staff?
The focus of this Coronavirus update is to answer some of your questions about directing your staff to stand down ‘without pay’. It will also provide ways you can support your staff through these tough times.
What should employers consider before standing employees down?
- Can my employees be ‘usefully employed’ during the Coronavirus Pandemic?
- How much accrued annual leave do my employees have?
- Are any of my employees eligible for long service?
- Are any of my employees on probation (6 months or 12 months for small business with 15 or less employees)? Is the position(s) still required?
When can I stand my employee(s) down ‘without pay’?
Under the Fair Work Act (section 524), an employer can direct employees to stand down ‘without pay’ if the employee(s) cannot be ‘usefully employed’.
The Coronavirus Pandemic is the example. The Government has directed:
- businesses to shut down/lock down; and
- people must self-isolate if they have returned from overseas and now interstate.
Why is it not necessary to pay my employees while they are on stand down?
The shut down of businesses is not your decision. It’s an enforceable government order that has been issued. This is why you may stand down your employee(s), if they cannot be ‘usefully employed’.
Do employees accrue leave entitlements on stand down without pay?
Employees on stand down without pay remain employed by you. As such, your employees while on stand down, will continue to accrue leave entitlements (personal/carer’s, annual and long service leave).
How long can my employees remain on stand down?
Is there a time limit?
So long as the Coronavirus pandemic continues, there is no time limit. When the Coronavirus is behind us, it is the government’s expectation that your employees will return to their job in your workplace.
How do I stand my employee(s) down? What are my obligations as an employer?
Check your relevant awards or enterprise agreement for any provisions about directing employees to stand down. For example, is there a requirement to consult with and notify your employees before directing them to stand down?
Although employers are not required to pay their employees during a period of stand down, you may consider other options before standing your employees down without pay.
Important note - Technically, an employee is not considered to be on ‘stand down without pay’ when they are receiving paid leave entitlements or other payments from their employer.
This is tough. What is a ‘fair’ approach to take when directing my employee(s) to stand down?
Meet with each employee to consider all options before directing the employee to stand down. You may agree to alternative arrangements with the employee before they are on stand down without pay. For example:
- to reduce their hours of work for a period of time
- to take a period of paid annual leave or long service leave entitlement (if eligible)
- staggering of accrued annual leave to spread payment over a longer period of time
- to take a period of paid annual leave in advance (employees with low balances).
What government support are my employees entitled to while on stand down without pay?
- Employees on stand down without pay may access Jobseeker/Coronavirus payments while they are still employed by you.
How can I support my employees through these tough times?
Talk with your employees and provide them with the information they need about the government’s Jobseeker and Coronavirus supplement. The Australian Government’s Fact Sheets on income support for individuals and early access to superannuation are good guidelines. They are easy to read and to understand. You can access these documents and other information from the links below.
Australia Government – Economic Response to the Coronavirus - Income support for individuals and households and early access to superannuation https://treasury.gov.au/coronavirus/households
Ulton - Stimulus relief package and what this could mean for you https://www.ulton.net/blog/stimulus-relief-package-and-what-this-could-mean-for-you
Fair Work Ombudsman website – Coronavirus and Australia workplace laws https://www.fairwork.gov.au/about-us/news-and-media-releases/website-news/coronavirus-and-australian-workplace-laws
Batch Mewing Lawyers - Employer’s Quick Guide to Coronavirus in the Workplace https://batchmewing.com.au/employers-quick-guide-to-coronavirus-in-the-workplace/
Can I terminate an employee during stand down?
Employers may terminate an employee during a period of stand down if the employee’s position is redundant. You must follow the redundancy process. Consult with the employee, provide a valid reason as to why the position is no longer required, give the employee notice and pay the employee a redundancy payment (if applicable).
One of my employees is on probation. They can no longer be ‘usefully’ employed as the job they do is no longer required?
Employers may terminate an employee during probation (qualifying period - 6 months or 12 months for small business equal to or less than 15 employees). Technically, the position is redundant due to decrease in demand for services/sales/products due to the Coronavirus. No redundancy payment is required.
An employer must give the employee 1 (one) week’s notice or pay the employee
1 (one) week’s pay in lieu of notice and pay the employee their accrued annual leave entitlements as a minimum.
These are tough times. Ulton is here for you.
If you require assistance with standing down your employee(s), contact our HR Consultant, Christine Guy direct on (07) 4154 0413 or mobile 0407 588 194 or email cguy@ulton.net
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