Numerous Australian businesses have been affected by Covid-19 and the restrictions directed by the Australian and NSW Government in response. Queues of people are lining up at Services NSW for Centrelink and employers are worried about the viability of their businesses.
At Carter Ferguson Solicitors we are increasingly providing advice to our clients about the rights of Employers and Employees as they come to grips with the uncertainty and added pressures of the current crisis.
When can an employer stand down an employee without pay?
The Fair Work Act sets out when an employer can stand down an employee without pay and states that this can only be done when the employee cannot be usefully employed because of a stoppage of work for any cause for which the employer cannot be reasonably held accountable.
The employer must demonstrate that:
- There is a stoppage of work;
- The employee cannot be usefully employed;
- The cause of the stoppage must be one for which the employer cannot be reasonably held responsible.
To show that an employee cannot be usefully employed, an employer must show that there is no work for the employee to do, even outside of the type of work the employee usually does.
If an employer unlawfully stands down an employee the employee will likely be able to recover unpaid wages from the employer.
Whilst stood down an employee remains employed for the period.
Employers are not required to make payments to employees for the period of a stand down but may choose to pay their employees. Employees accrue leave as normal.
Employers can consider other options to reduce wages and expenses in these troubled times including:
- Seeking employees’ agreement to take paid (or unpaid) leave for a period;
- In limited circumstances, directing employees to take paid annual leave;
- In limited circumstances, negotiating with employees to change regular rosters or hours of work; and
- Terminating the employment of the employees, in which case the employer may have to provide redundancy pay.
Employer and employee relationships can be complicated and employers must take care to ensure they are not exerting undue influence on the employee. Disputed matters will be decided on a case by case basis and will depend on the facts of the matter.
If you have any questions regarding workplace laws and how the Covid-19 situation is affecting your business or employment, please do not hesitate to contact one of our offices on 1300 235 345 or at [email protected]