Reading time: 5 minutes

The coronavirus (COVID-19) outbreak is having a ripple effect on the worldwide economy. As a result, employers are now scrambling to put flexible working plans in place to prepare for uncertain times ahead. If your workers are unable to work remotely, you may have to stand-down employees. This article provides practical guidance on how to manage these issues to help your business survive this difficult time. 

Employees and COVID-19

Can I Stand-Down My Employees?

As an employer, you do not have a general right to suspend your employees from performing their obligations. You ordinarily must provide work for your permanent employees.

However, the law does provide employers with the power to stand-down employees in accordance with:

  • the Fair Work Act, 
  • an enterprise agreement or
  • modern award

Generally, the right to stand-down your employees arises during a period in which:

  • the employee cannot usefully be employed; or
  • because of a stoppage of work for any cause for which you cannot be held responsible for.

However, meeting those thresholds is not simple. As an employer, you will not have the right to stand-down an employee if there is use­ful work avail­able. If the reason for the stoppage of work is an economic downturn, the stand-down provisions are not likely to apply. 

Stand-downs can sometimes be unlawful, and you should only use one as a last resort. As such, you should always seek legal advice before attempting to rely on stand-down provisions.

Will My Employees Still Receive Wages?

If you can rely on the stand-down provisions, you will not need to pay your employees during this period. This is because the right to stand-down employees intends relieve employers of their obligation to pay wages.

However, the consequences of a stand-down can be severe for your employees. This is because they may no receive wages for a prolonged period of time. As such, stand-downs may be challenged if you do not implement it in appropriate circumstances.

If you do not have the right to stand employees down, you may face back pay claims or potential penalties.

Can My Employees Take Paid Leave?

In circumstances where your employees have been stood down, they may request to access their paid leave entitlements over the stand-down period to mitigate any loss of income.

For example, your employees may wish to access their:

  • annual leave;
  • long service leave; or
  • carer’s leave.

If your employees do take leave during the stand-down period, your employees will continue to accrue entitlements for that period. This means that, technically, they have not been stood down.

Can I Shut Down My Business?

A shut down occurs when a business temporarily closes during slower periods of the year. If a modern award applies to your business, it may outline when you can rely on a shut down to direct employees to take annual leave. If an award or agreement does not cover your employees, you can only direct employees to take annual leave if this direction is reasonable.

Alternatively, you can always suggest that your employees take a period of accrued paid leave or any other leave. Your employees may well agree to take a period of paid leave to help safeguard the future of their job.

What About My Casual Employees?

Casual employees do not have paid leave entitlements. As such, they are only entitled to be paid for hours they work. However, there has been a lot of consideration recently as to what constitutes a genuine casual employee, so you should exercise caution if you have concerns about whether your casual employees are really casual.

For your genuine casual employees, if they require time off work because they have contracted coronavirus or are required to self-isolate, they have no entitlements to payment.

However, many employers around the country are choosing to implement policies which confer some kind of benefit to casuals given the current environment.

What If My Employees Are No Longer Required?

If you face a situation where your employees’ roles are no longer required due to the economic downturn, this will generally provide a valid reason to commence a redundancy process.

However, it is important to comply with your consultation obligations under any applicable modern awards or enterprise agreements. You should also explore any alternative options, such as a reduction in hours or pay, prior to confirming the redundancy. As such, you should seek legal advice before commencing any redundancy process to mitigate the risk of a claim for unfair dismissal.

Key Takeaways

As a general rule, you should aim to be as flexible as possible with your employees during this period of uncertainty. Where remote working is not possible, you may find yourself in a position where there is no useful work for your employees to perform. However, if you are considering relying on stand-down provisions or making your employees redundant, you should seek legal advice before making any decisions. If you have any questions about your employment options during the coronavirus, contact LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.



Redundancies and Restructuring: Understanding Your Employer Obligations

Thursday 7 July | 11:00 - 11:45am

If you plan on making a role redundant, it is crucial that you understand your employer obligations. Our free webinar will explain.
Register Now

How to Sponsor Foreign Workers For Your Tech Business

Wednesday 13 July | 11:00 - 11:45am

Need web3 talent for your tech business? Consider sponsoring workers from overseas. Join our free webinar to learn more.
Register Now

Advertising 101: Social Media, Influencers and the Law

Thursday 21 July | 11:00 - 11:45am

Learn how to promote your business on social media without breaking the law. Register for our free webinar today.
Register Now

Structuring for Certainty in Uncertain Times

Tuesday 26 July | 12:00 - 12:45pm

Learn how to structure to weather storm and ensure you can take advantage of the “green shoots” opportunities arising on the other side of a recession.
Register Now

Playing for the Prize: How to Run Trade Promotions

Thursday 28 July | 11:00 - 11:45am

Running a promotion with a prize? Your business has specific trade promotion obligations. Join our free webinar to learn more.
Register Now

Web3 Essentials: Understanding SAFT Agreements

Tuesday 2 August | 11:00 - 11:45am

Learn how SAFT Agreements can help your Web3 business when raising capital. Register today for our free webinar.
Register Now

Understanding Your Annual Franchise Update Obligations

Wednesday 3 August | 11:00 - 11:45am

Franchisors must meet annual reporting obligations each October. Understand your legal requirements by registering for our free webinar today.
Register Now

Legal Essentials for Product Manufacturers

Thursday 11 August | 11:00 - 11:45am

As a product manufacturer, do you know your legal obligations if there is a product recall? Join our free webinar to learn more.
Register Now

About LegalVision: LegalVision is a commercial law firm that provides businesses with affordable and ongoing legal assistance through our industry-first membership.

By becoming a member, you'll have an experienced legal team ready to answer your questions, draft and review your contracts, and resolve your disputes. All the legal assistance your business needs, for a low monthly fee.

Learn more about our membership

Need Legal Help? Submit an Enquiry

If you would like to get in touch with our team and learn more about how our membership can help your business, fill out the form below.

Our Awards

  • 2020 Innovation Award 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Award 2020 Employer of Choice Winner – Australasian Lawyer
  • 2020 Financial Times Award 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year Award 2021 Law Firm of the Year - Australasian Law Awards
  • 2022 Law Firm of the Year Winner 2022 Law Firm of the Year - Australasian Law Awards