As a consequence of the CIVID-19 (Coronavirus) a number of our clients have been impacted in different ways. In trying to manage these impacts we have had several clients contact us regarding standing workers down without pay.
The stand down provisions specified in the Fair Work Act, 2009 do not give employers a blanket right to stand workers down. Furthermore, there are a series of conditions that must be met before these provisions should be considered including:
- Has there actually been a stoppage of work in all or part of the business,
- Is the stoppage for a reason outside of the businesses control, and
- Can affected workers be employed to perform other useful work within the business.
Importantly, a downturn in business trading conditions does not typically trigger these provisions.
The risks associated with the unjustified use of the stand down provisions is high and can include:
- Workers seeking back payment of wages for the whole period of the stand down,
- Constructive dismissal claims (such as unfair dismissal and general protections claims), and
- Workers alleging that the stand down amounted to unreasonable management action causing them a psychological injury in relation to which they bring a workers compensation claim.
The approach we have taken with clients where there may not necessarily be sufficient justification to stand workers down without pay, is to consult with workers (in a genuine way) to secure the flexibility they desire. This can not only include taking a period(s) of unpaid leave but also interim wage reductions and interim changes in hours of work. All workers are acutely aware of the circumstances that we are now faced with and we have found that they will generally work with employers to achieve arrangements that will assist your businesses at this time.
While consulting with workers to secure flexibility will not guarantee that a claim ‘down the track’ will be made, it will mitigate against the impact of any claim given that you have consulted and secured mutually acceptable arrangements for genuine reasons.
If you are considering arrangements to sustain your business that includes requesting workers to take unpaid leave, we would suggest you contact us on 13090 723 911 so that we can work with you to implement arrangements that will allow you to trade through this period of unprecedented business disruption.