As part of the Harvest HR & People Solutions four part Webinar Series “Workforce Management in Crisis”, we gained general information from Employment Lawyer, Brett Pomroy on Standing Down Workers amidst the COVID-19 crisis.
Here’s what we covered:
The Section of the Fair Work Act that many Employers are referencing in standing down their workers is Section 524.
Section 524 of the Act states:
An employer may, under this subsection, stand down an employee during a period in which the employee cannot usefully be employed because of one of the following circumstances:
- industrial action (other than industrial action organised or engaged in by the employer)
- a breakdown in machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown;
- a stoppage of work for any cause for which the employer cannot reasonably be held responsible
With Myer closing its doors on Saturday (28 March 2020) they would be resting on this part of the Law as their reason to stand down workers.
Additionally, companies that have an enterprise agreement that provides stand down terms, the stand down terms in the agreement will apply. If no provision for stand down is contained within a specific workplace agreement then Section 524 of the Fair Work Act applies.
Brett recommend that, if a company is expecting to ramp up again that a company should not seek to access redundancy provisions as redundancy refers to a role not coming back and for the worker not to be reemployed (to undertake the same duties) in the future.
Standing Down vs Accessing Leave Provisions
During a period of stand down, the employer is not required to pay an employee for the stand down period however an employee continues to accrue leave entitlements (eg/ annual leave and personal/carer’s leave) while stood down. Brett further mentioned that upon being stood down, an employee cannot access any leave entitlements.
Additionally, standing down does not have to apply across a business, just those areas that have been impacted.
Some employers are using the COVID-19 crisis to have employees take annual leave and long service leave (if it applies) to reduce an employer’s accrued leave entitlements to staff members. A question was asked if employees can access their annual leave in stand down situations and this can only be done prior to a stand down order being made.
Brett mentioned that it is in an employer’s best interest, if it offers employees to take their leave provisions, that this offer be made to all workers, not to a select few. He also cautioned employers on taking this action, especially if business viability and solvency is in question. There have been situations where workers who, while on annual leave, produce a medical certificate towards the end of their annual leave period putting them into a new leave entitlement bracket and further paid leave which may put a further financial impost on an employer.
Brett mentioned that employees can, if circumstances permit, access personal and carer’s leave depending on their situation (and if not stood down) but can only access sick leave if they are indeed ill.
A question came as to whether an employer can partly stand down a worker – for example, stand down for three days and work for two. Brett mentioned that, in this case a revision to the employment contract would be made, issued and agreed by the worker. This falls outside the stand down provisions.
Closing Business and Standing Down Workers Voluntarily
We unpacked the case where hospitality and leisure venues closed (though government order) versus those businesses that are closing voluntarily.
Employees who are stood down due to government order can immediately access economic support packages whereas those stood down as a result of the voluntary closure by an organisation could only access standard unemployment benefits.
For Employers, organisations that were forced to close because it was a edict by government they can stand downs workers and Section 524 1. c. of the Fair Work Act applies whereas other businesses that are not directed by government may find themselves in a grey area – however they will be arguing the same law and stand down provisions apply.
We also discussed businesses where certain aspects of business cease whereas certain aspects carry on and that employers should seek to redeploy workers or at least having them access their entitled leave prior to standing them down. However, if there is no other division to house employees and where the work they do can no longer continue then this would be grounds for standing down your workers.
Time and Reasonable Termination
Stand down orders are not time limited however a company may readdress its workforce throughout the stand down period or when it ramps up post the crisis. Should a business not require the staff numbers it held prior to the crisis a stood down worker can be retrenched as a result of an organisation restructure and redundancy provisions.
Employees who are on fixed term contracts during a stand-down would conclude their contract unless specifically directed by the organisation to continue post the time the stand-down order was made.
Where to from here?
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Webinar Part 2, by Brett Pomroy – “Letting Staff Go”
If you are interested in learning more, Harvest’s Workforce Management in Crisis Package is available for purchase for only $99.95 (incl GST).
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This is general summary only and in no way considered legal advice. For advice specific to your circumstances, please arrange a private consultation.