Standing down employees during COVID-19?

Decisions from the Fair Work Commission 3 min read

A number of recent decisions of the Fair Work Commission (FWC) provide valuable insights for employers that are considering standing down their employees in an attempt to ensure the ongoing viability of their business during COVID-19.

We have recently reported on two FWC decisions concerning JobKeeper enabling directions to reduce working hours (here and here). This Insight considers cases arising out of decisions by employers to reduce their employees' working hours to zero.

Key takeaways

Employers who are contemplating standing down employees should:

• consider all other available options, including accessing leave and changes to duties, hours or rosters;
• use an objective criterion upon which they base stand down decisions;
• ensure the burden of the stand down is distributed fairly amongst their workforce; and
• comply with any applicable consultation requirements.

Background

Section 524 of the Fair Work Act 2009 (Cth) (FW Act) empowers employers to stand down employees where they cannot be usefully employed because of:

• industrial action(other than industrial action organised or engaged in by the employer);
• a breakdown of machinery or equipment (if the employercannot reasonably be held responsible for the breakdown); or
• a stoppage of work for any cause for which the employercannot reasonably be held responsible.

In addition to the general stand down provisions, temporary JobKeeper enabling stand down provisions allow eligible employers to stand down employees who cannot be usefully employed for their normal days or hours due to COVID-19.

Decisions

In a recent case concerning a mobile technology company, the FWC found that a JobKeeper enabling stand down direction to reduce an employee's hours to zero was unreasonable.¹ The FWC held that stand down directions need to be equitable, fair or justifiable. In this case, the employee was the only one in his team whose hours were reduced to zero. The reduction in hours should have been spread more evenly between the affected employee and his colleagues.

Elsewhere, a stand down under s524 of the FW Act by a meat-processing company was unlawful because there was no stoppage of work. Although the employer had experienced a downturn in overall business due to the impacts of COVID-19 on its supply chains, there was no stoppage of work in a defined business activity (ie the demand for the level of work waned in response to an external event, but this does not constitute a stoppage of work under s524).²

In Victoria, a plumbing company's stand down of an employee was lawful in circumstances where the state government's Stage 4 restrictions impacted its ability to provide work for its plumbing crew.³ The employer could not secure any new work, and its capacity to perform existing work was dependent upon managers of those projects allowing them access within the restrictions. The employee could not be usefully employed because of a stoppage of work due to the Stage 4 restrictions and the employer could not reasonably be held responsible for the stoppage.