Need to stand down staff? Here are the rules you need to know

It has now been more than 18 months since the start of the COVID-19 pandemic and while Australia has no doubt largely escaped the devastation experienced by other countries around the world, the highly infectious Delta variant has presented a renewed threat to both the health of Australians and the Australian economy. 

Stay at home orders are now in place across South Australia, Victoria and large parts of New South Wales, affecting some 13 million Australians. 

Last year employers had the benefit of JobKeeper enabling directions, which enabled them to issue directions in relation to duties and location of work and to reach agreement with their employees on days and times of work, including stand-downs. 

But now, without JobKeeper, many businesses have had no choice but to stand down large parts of their workforce. 

What does the Fair Work Act say about stand downs?

Section 524 of the Fair Work Act provides that employees may be stood down without pay in certain circumstances, including where an employee cannot be usefully employed because of a stoppage of work for which the employer cannot be held responsible. 

The stand down provisions under the Fair Work Act do not apply where an enterprise agreement or contract of employment provides for stand down in the same circumstances. In those instances, whether an employee can be stood down without pay will depend on the provisions of the enterprise agreement or contract of employment.

Many businesses previously relied on JobKeeper enabling directions as an alternative to standing down their workforce under the Fair Work Act. This was particularly evident in industries where businesses had experienced a significant reduction in demand but had not been ordered to close. 

While a business that has been ordered to close may stand an employee down under Section 524 of the Fair Work Act, the situation is less clear where a business is permitted to trade but it is not financially viable to do so. 

It is a question of fact as to whether an employee ‘cannot be usefully employed’. Regard may be had to the ‘economic consequences’ to the employer, but employers generally can’t stand down employees simply because of a deterioration of business conditions.

How it relates to working from home

The JobKeeper enabling directions played a key role in assisting businesses to manage the downturn by continuing to operate albeit in a reduced capacity.

As the Delta variant continues to spread, the NSW government in particular has become increasingly concerned about transmission of COVID-19 in the workplace. 

The NSW Public Health Order now says:

• The Minister directs that an employer must require an employee to work at the employee’s place of residence; and
• Subclause (1) does not apply if it is not reasonably practicable for the employee to work at the employee’s place of residence.

Employers that breach the Public Health Order may be subject to penalties of up to $10,000.

Whether it is reasonably practicable for an employee to perform their work from home is now a key factor in determining whether an employee can be usefully employed.

The Public Health Orders do not provide any guidance as to what factors must be taken into account in determining whether it is not reasonably practicable to perform their work from home. 

According to the NSW government, whether working from home is a reasonably practicable measure will depend on the specifics of the work being performed, the facilities available for the employee to work remotely and the ability for the employee to perform their work effectively and safely from home.

Employers have a moral obligation to ensure that their people and communities thrive. With the highly infectious Delta variant currently circulating throughout the community, employers should be looking at what they can do to enable their employees to perform their work safely from home rather than searching for reasons as to why an employee needs to attend the workplace. 

Calls for IR flexibilities to be revived

As restrictions continue to tighten, there are increasing calls from business groups for the federal government to urgently reintroduce those temporary workplace flexibilities when Parliament resumes next month. 

In a statement released last week, Ai Group, ACCI and five other leading representative bodies said:

The provisions were essential in enabling employers to maintain a connection to their employees through a period when, absent of the provisions, many businesses would have become unviable. An independent review of the Fair Work Act flexibilities showed they had a direct impact on slowing the loss of jobs and decline in wages during the initial COVID-19 economic shock – close to 94 per cent of businesses found the provisions important or essential to maintaining their business operations.

We need these flexibilities urgently reinstated alongside government financial support in order to ensure businesses have the necessary tools available to keep as many employees in jobs as possible.

While there are federal and state government support measures in place, business groups say these support measures are incomplete without having the ability issue directions in relation to duties and location of work and to reach agreement with employees on days and times of work, including stand-downs. 

There is no doubt that JobKeeper played a crucial role in supporting businesses and employers last time around. However, it remains to be seen how the Coalition will respond given there seems to be no clear end in sight, at least in NSW at the moment.