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As an employer, you might go through periods where there is simply no work for your staff to perform. This may arise for a variety of reasons, including: 

  • a blackout, 
  • severe weather, or
  • a machinery breakdown. 

Where staff cannot be usefully employed, you can ‘stand them down’ and send the employees home without pay. But, are you legally allowed to do this? This article will explain when you can send employeeshome due to circumstances beyond your control.

When Can You Stand Down Employees?

There are three situations where you can stand-down an employee without pay if the employee cannot be usefully employed. These are if there is:

  1. an industrial action or strike (not including any you have caused);
  2. a breakdown of machinery or equipment that you did not cause; and
  3. a stoppage in work activities that are outside your control (e.g. due to a flood, loss of power, or natural disaster).

You will need to check to see if there are any additional requirements that you must meet before you can stand down an employee. You can check this in your: 

  • employment contracts;
  • modern awards; and 
  • enterprise agreements.

For example, employment agreements may include clauses relating to mandatory notice periods or consultation processes. If so, you must adhere to these clauses before you can send an employee home without pay.  

If you stand down your employees when they are entitled to remain at work, they can take action against your business for breaching their employment contract. Here, they will be able to recover the wages they were entitled to during the stand-down period along with additional compensation.

What Is ‘Useful Employment’?

Just because there is a strike, a breakdown of equipment or another event that disrupts the workplace, you cannot automatically stand down employees without pay. 

For example, even if any equipment breaks down, employees will still be able to perform duties such as clean or perform stocktake. Therefore, they are entitled to remain at work and perform those tasks.

If you wish to stand down employees, you will need to demonstrate that there is no useful employment that your workers can engage in.

The fundamental principles in determining whether or not an employee can be usefully employed are:

  1. if they can undertake work activities which are within the terms of their employment contract, even if they do not normally complete that kind of work;
  2. if there is work for some but not all of the employees, you cannot validly stand down the entire workforce; and
  3. you cannot stand down the entire workforce only because using some workers during a stand-down period will reduce the workload when normal work resumes.

When Can’t You Stand Down Your Employees?

A period of slow work is not a valid reason to stand down your employees.

As an example, many businesses have a reduced workload over the Christmas period. You can’t stand-down your employees during these slow periods. But you may choose to have a shut-down period where staff are directed to take annual leave. You still need to pay your staff for the annual leave that they have accrued during the shut-down period.

Key Takeaways

You can stand down employees without pay where the employees cannot be put to use within the business. The most common situations giving rise to a stand-down include: 

  • strikes;
  • equipment failures; and 
  • a natural disaster or blackout. 

If you need to stand down your employees for one of these reasons, it is important to ensure that you are not breaching any employment obligations. If you have any questions about standing down employees, contact LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.

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