Articles > Employment

What Is Employee Stand Down and Why Do It?

June 17, 2021   Philip Evangelou

As everyone is aware, the coronavirus pandemic has had a monstrous effect on businesses globally. To financially survive, a wide scale amount of employers have unfortunately had to stand down their employees. If a manager decides to stand down an employee, this means that they have no useful work for them and they are temporarily out of work. This does not mean they don’t still work for you, they are just no longer paid until there is useful work available. The Fair Work Commission has not disclosed the specific outline of what useful work means. But courts have determined if you’re an employer who has received a benefit for the work provided, then it is useful.

When Can A Manager Stand Down Employees?

There are three significant scenarios in which a manager can stand down an employee. These include equipment breakdown for which the employer is not responsible for the cause of damage. Secondly, industrial action that is not organised by the employer. The final scenario is the stoppage of work whereby the employer is irresponsible. Stoppage of work is the most prominent cause of standing down employees currently due to the COVID-19 pandemic. An employer cannot be held responsible for a pandemic, allowing them to force an employee to stand down. There are several legal requirements that must be met before standing down an employee, so it is important to seek legal advice prior to commencement.

What Is A Stoppage Of Work That An Employer Cannot Be Held Responsible For?

It ultimately depends on how the coronavirus pandemic has affected the overall business and its operations for it to be considered a stoppage of work that you are irresponsible for. For example, if government restrictions have forced everyone to stay home or cease business operations, then that may grant an employer to stand down employees.

Example Of A Stand Down:

Jack owns an airline, due to the pandemic international travel is restricted. This has cut an enormous amount of revenue from the company. Jack has over 10,000 employees but there is no longer enough work for a quarter of them. In this scenario the stoppage of work has been caused by the pandemic and government restrictions. Jack is not responsible for the stoppage of work and has no longer useful work for a lot of his employees, forcing him to stand them down.

What Rights Do Employees Have?

After an employee is stood down, they are still employed by the company. This ultimately means that aside from their right to work or be paid, the contract entitlements continue to apply. Employees can continue to accrue leave entitlements during the stand down period depending on the type of leave. Depending on what state you are from in Australia, entitlements may not apply such as long service leave or annual leave.

What Are An Employer’s Options If They Do Not Want To Stand Down Their Employees?

There are several routes that an employer can take as standing down an employee can be difficult. The options that an employer can take include:

  • Mutually agreeing to reduced hours until the amount of work increases
  • Mutually agreeing to use accrued leave entitlements allowing employees to use leave entitlements
  • Redundancies if there is no work for your employer following them being stood down

It is important to seek legal advice if you are unsure about anything and to also ensure that agreements are confirmed in writing and signed by both parties. 

Key Takeaways

Ensuring you have knowledge of the information before enforcing any actions on employees. Standing down staff is a complex and difficult decision for employers to make. The three main scenarios allowing a manager to stand down an employee; Equipment breakdown, industrial action and stoppage of work. Make it clear what rights and entitlements the employees still have during the stand down period. 

About Philip Evangelou

phillipPhil is a director at OpenLegal. He has over 16 years experience working in private practice and in-house counsel in Sydney and London, giving him expertise in employment law, IP, finance, leases, dispute resolution, insurance and contracts.