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UpdatesOct 13, 2020

Standing down employees: When will it be lawful?

Employers can lawfully stand down an employee pursuant to section 524 of the Fair Work Act 2009 (Cth) (FW Act) where an employee cannot be usefully employed.

By Kelly Godfrey

Employers can lawfully stand down an employee pursuant to section 524 of the Fair Work Act 2009 (Cth) (FW Act) where an employee cannot be usefully employed because of:

Standing down employees under a JobKeeper-enabling direction

Currently, there are additional temporary JobKeeper-enabling stand down provisions available for eligible employers where employees cannot be usefully employed.

In Dylan Collis v SPI Plumbing (Australia) Pty Ltd (2020), the Fair Work Commission (FWC) held that the stand down of Mr Collis by Victorian plumbing company SPI Plumbing (Australia) Pty Ltd (SPI) was lawful as he could not be usefully employed. The Victorian Government’s Stage 4 COVID-19 restrictions meant SPI could not obtain new work, and its ability to perform existing work was restrained by obtaining access under the Government’s restrictions. The stoppage of work was due to the Government’s restrictions and not SPI’s actions.

When will a stand down be unlawful?

It’s important to remember that the JobKeeper-enabling stand down provisions do not grant employers an unfettered right to stand down employees unfairly or unnecessarily.

In Wilfred Lam v Mobile Technology International Pty Ltd (2020), the FWC found that Mobile Technology International Pty Ltd (MTI) had unlawfully stood down Mr Lam under the temporary JobKeeper provisions to zero hours. Since no other employees’ hours had been reduced to zero, the FWC held that MTI had not acted equitably, fairly or justifiably. The FWC held that the reduction in hours should have been evenly spread among all employees.

In Mr Ryan La Plume v Thomas Foods International Pty Limited T/A Thomas Foods International (2020), the FWC found a stand down by Thomas Foods International Pty Limited T/A Thomas Foods International (TFI) under s524 of the FW Act was unlawful because, while there had been a slowdown in work due to COVID-19, there was not a complete stoppage of work. TFI was not eligible for JobKeeper so the stand down was undertaken under s524 rather than the JobKeeper-enabling stand down provisions.

How to proceed with a lawful stand down

If you are contemplating standing down employees:

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