Standing Down Employees During Victoria’s 5 Day Short-Circuit

Well, I don’t think any of us were surprised by the announcement of a 5-day statewide lockdown, especially given how other states have reacted to, and overcome similar outbreaks.

Over the weekend I have had quite a few questions about the treatment of employees who have no work for the next three days (hopefully it is only three days!). The reassuring thing is that nothing has changed on this front, the requirements about this have been in place for quite a while, thankfully we have just had a break from having to think about them.

In short, while I recommend that you get some specific advice to address your own circumstances, generally speaking, if you have no work for employees over the next three days, you have a few options – more details below.

When reading this general information, please remember that you will need to consider any applicable award, enterprise agreement, employment contract or workplace policy. These can have different or extra rules about when an employer can stand down an employee. For example, some awards and agreements include a requirement to notify or consult with staff before they can be stood down.

As always, if you’d like some help with making arrangements (such as template letters), we are happy to help – send through an email or give us a call.

A JobKeeper enabling stand down direction allows a qualifying employer to direct an eligible employee to temporarily:

• not work on one or more days that they usually work
• work for fewer hours overall than the employee usually works
• not work any hours at all
• work a shorter period than the employee usually works on a particular day or days

For a qualifying employer to give a JobKeeper enabling stand down direction, they need to:

• qualify for and enrol in the JobKeeper scheme
• be entitled to JobKeeper payments for the employee to whom the direction applies

A qualifying employer can give an eligible employee a JobKeeper enabling stand down direction if the employee cannot be usefully employed for their normal days or hours because of business changes attributable to a government initiative to slow coronavirus transmission (such as 5-day circuit breaker).

To give a direction, qualifying employers need to:

Legacy employers are employers that:

• previously participated in the JobKeeper scheme, but no longer qualify, or choose not to participate, from 28 September 2020
• demonstrate at least a 10% decline in turnover for a relevant quarter and get either a:
  • • 10% decline in turnover certificate from an eligible financial service provider (BTN can do these for you), or
    • if you’re a small business (fewer than 15 employees), a statutory declaration.

Information about stat declarations can be found here https://www.ag.gov.au/legal-system/statutory-declarations/complete-statutory-declaration

If your business is not currently receiving JobKeeper or you are receiving JobKeeper but an employee is not eligible (such as a new employee) for JobKeeper, then you will need to check whether they can stand down employees:

• under the general Fair Work Act provisions
• under any applicable award, enterprise agreement, employment contract or workplace policy, in case any different or extra rules apply.

Under section 524 of the Fair Work Act, an employer can stand down an employee without pay where they cannot usefully be employed because of a stoppage of work for any cause for which the employer cannot reasonably be held responsible.

Employees who are stood down without pay are still employed for the period of the stand down.

To stand down an employee using these provisions, an employer needs to be able to show that:

• there is a stoppage of work
• the employee to be stood down can’t usefully be employed because of the stoppage (this isn’t limited to the work an employee usually performs)
• the cause of the stoppage must be one that the employer cannot reasonably be held responsible for.

Employers generally cannot stand down employees under the Fair Work Act stand down provisions simply because of a deterioration of business conditions or because an employee has coronavirus.

If an enterprise agreement or employment contract applies to the employees and allows the employer to stand down employees because of a stoppage of work, the employer must use the provisions in the agreement or contract. They cannot use the general Fair Work Act provisions.

If an employer unlawfully stands down employees without pay, their employees may be able to recover unpaid wages.

Some examples of when employers may be able to stand down employees include:

• if an enforceable government direction required the business to close (which means the employee cannot be usefully employed, even from another location)
• if a large proportion of the workforce was required to self-quarantine and the remaining employees/workforce cannot be usefully employed
• if there was a stoppage of work due to a lack of supply for which the employer cannot be held responsible.

An employer should discuss and communicate any decisions they make about implementing a stand-down with their employees.

While in some circumstances an employer can direct an employee to take accrued annual leave, this will typically need to be done by agreement.

Some awards provide for 2 weeks’ unpaid pandemic leave and allow employees to take twice as much annual leave at half their normal pay if their employer agrees.

Additionally, some awards have been varied to give employers and employees extra flexibility to agree on alternative working arrangements and make requests about annual leave.

In some circumstances, employees won’t have access to paid leave. For example, if they’re permanent but have already used all their accrued leave entitlements. In these situations, employers and employees can agree for an employee to take unpaid leave.

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