For businesses eligible for JobKeeper, please see our updated information on standing down employees and JobKeeper here. 

COVID-19 virus has and will continue to throw up many unexpected and difficult employment law issues for employers to manage in what is a fast changing and fluid situation.

The standing down of 20,000 Qantas staff is just one such example of the difficult decisions being made by employers across the country and raises questions regarding the powers available to employers under financial strain due to the coronavirus pandemic.

Can an employer stand down employees without pay?

Yes. Employers have the statutory power to stand down staff without pay under section 524 of the Fair Work Act 2009. It reads:

An employer may, under this subsection, stand down on an unpaid basis an employee during a period in which the employee cannot usefully be employed because of one of the following circumstances:

(a) Industrial action (other than industrial action organised or engaged in by the employer);

(b) A breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown;

(c) A stoppage of work for any cause for which the employer cannot reasonably be held responsible.

Historically, many Awards also contained “stand down” clauses, permitting an employer to send a worker home without pay where no work was available through circumstances outside the employer’s control. Such a power was commonly exercised where industrial action by one part of a firm’s workforce left other workers idle. The same could happen where a business had to hold production because of problems affecting a customer or supplier. Although such clauses to do not appear in modern Awards, they can still be found in enterprise agreements.

The guidance available from the Fair Work Ombudsman titled “Coronavirus and Australian workplace laws” confirms the statutory power exists under section 524 and can be exercised in the circumstances set out above including “a stoppage of work for which the employer can’t be held responsible”. The most common scenarios are severe and inclement weather or natural disasters.

It is becoming increasingly clear the impact of Coronavirus may cause a stoppage of work for which the employer cannot reasonably be held responsible e.g. the ban on international travel imposed on the airline industry or other government issued directives for closure not at the discretion of the business. However, we recommend that specific advice be obtained prior to invoking such a drastic measure given its economic impact on employees affected.

Where can I find more information?

In our experience, the starting point and best general reference is the guidance issued by the Fair Work Ombudsman – Coronavirus and Australia workplace laws which is regularly updated.

Our workplace relations team are already working with clients to address these and other challenges arising from the impact of Coronavirus on workplaces and would be pleased to assist you with any advice including urgent advice.


About the Author

Tim Greenall

Special Counsel
Commercially savvy with over 30 years of experience, Tim provides pragmatic employment advice to his clients.

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