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8 October 2021

Can I Stand-Down My Employee ‘Just Because’?

Standing down an employee might seem like a simple solution for an employer. Unfortunately, the ability to stand-down an employee is quite limited.

‘Just because’ you wish to stand-down an employee does not necessarily mean you can from a legal perspective under the Fair Work Act or other applicable industrial instruments like an Enterprise Agreement or Contract of Employment.

An employer must be able to provide a suitable justification to be able to instruct a stand-down in a lawful and reasonable manner.

Under the Fair Work Act 2009 S. 524, there is limited scope to stand-down an employee without pay. The way an employer can use the Act to stand-down an employee is under the following circumstances.

Employers can stand down employees under this subsection if they cannot be successfully employed because of one of the following reasons:

1. industrial action(other than industrial action organised or engaged in by the employer);
2. a breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown;
3. a stoppage of work for any cause for which the employer cannot reasonably be held responsible.

The COVID-19 Pandemic has been a circumstance whereby some employers have been able to utilise the Act and stand-down employees due to mandated Government instructions of business closures. Although, those businesses that were not mandated to shut their doors could not use the provisions in the Act, even if their business was suffering operationally.

If there is no provision under an industrial instrument to access stand-down provisions, employers need to think strategically. Options to consider can include asking employees:

• to take accrued leave entitlements including annual and long service leave; or
• if they would be in agreement to take leave without pay; or
• if they would consider reduced hours of work to support the difficult operational situation the employer may be facing.

Standing-down an employee must be legal, have merit and follow the correct process.

Employers need to ensure they have the correct structure and processes in place to support their business when difficult times arise. They cannot stand-down an employee ‘just because’ they wish too.

Employer obligations can be complex to understand, we recommend you seek expert advice before planning to stand-down an employee.

To begin with, check out our Fact Sheet on standing down an employee or feel free to contact Now Actually for a confidential discussion.