COVID-19 - Standing Employees Down

As at 22 March 2020 at 9:30pm, NECA understands, from a Federal Government point of view, that offices, construction sites and the like will continue to operate for the time being. It should be noted that the individual State Governments may make particular rulings with respect to their own States.

Stand Down under the Fair Work Act 

Section 524 of the Fair Work Act 2009 (Cth) (FW Act) provides as follows:

(1) An employer may, under this subsection, stand down an employee during a period in which the employee cannot be usefully 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 be held responsible.


(3) If an employer stands down an employee during a period under subsection (1) the employer is not required to make payments to the employee for that period. 

In summary, an employee can only be stood down without pay if they cannot be usefully employed because of a stoppage of work (in the case of COVID-19) for any cause for which the employer cannot reasonably be held responsible for. Employers should allow employees, during a stand down period, to use accrued annual leave, RDO’s or long service leave entitlements (if applicable). Further, employees will continue to accrue leave entitlements as usual. 

An employer’s decision to stand down employees should be treated cautiously and employers should seek specific advice about their specific circumstances.  For a stand down to occur, the employer must be able to show the following:

  1. There is a stoppage of work;
  2. The employees to be stood down cannot usefully be employed (which is not limited to the work the employee usually performs); and
  3. The cause of the stoppage must also be the one that the employer cannot be reasonably responsible for. 

It should be noted that employers cannot stand down employees simply due to a lack of work or a deterioration of business conditions. Further, an employee cannot be stood down because they have contracted COVID-19, but rather should be paid under the relevant employee’s personal leave entitlements (if any). Examples for which an employee may be stood down include (but are not limited to):

  1. If there is an enforceable government order or direction requiring the business to close (thereby resulting in no work at all for the employees to do); or
  2. If there was a stoppage of work due to lack of supply for which the employer cannot be held responsible. 

It should be noted that enterprise agreements and employment contracts can have different or extra rules about when an employer can stand down an employee without pay. Members are encouraged to review these industrial instruments prior to standing down any employees. 

Note that employees cannot be stood down indefinitely and if it is clear that a position has become redundant, the employer is obliged to comply with legislative, Award and contractual obligations in relation to redundancy.

Disclaimer: This summary is a guide only and is not legal advice. For more information on legislative or contractual obligations, please contact NECA (WA) Legal on (08) 6241 6129  or email necalegalwa@ecawa.org.au.