Make sure you’re up to speed with stand down procedures

The National Office has received numerous enquiries with regards to standing down of employees. Many employers are facing a tough decision, namely whether to stand down employees or make them redundant. HRIA’s legal partner MST Lawyers urge members to be clear about how the different approaches affect them and their staff.

Stand down

Employees who are stood down must be done so in accordance with section 524 of the Fair Work Act, an enterprise agreement or contract of employment.

In summary, stand down is available where there is a stoppage of work for which the employer cannot be reasonably held responsible. This includes acts of god, enforceable government directions, breakdown of machinery etc.

Generally, a shortage of work would not be considered a reason to stand employees down and therefore advice should be sought before any decision to stand down is made.

When stood down employees are still employed, they accrue entitlements such as annual leave, personal leave and long service leave. Additionally, they must receive payment for all public holidays that they would have worked had they not been on stand down.

Stand down is done so without pay.

Redundancy

Redundancy is used when an employer needs to terminate the employee’s employment due to the employer no longer requiring the employee’s role to be done by anyone.

This is usually enacted where there are efficiencies that have been created (e.g new software) which results in a person’s job no longer being required, or where there is a lack of work enabling one person to undertake two employee’s roles.

When someone is made redundant their employment will be terminated and they are entitled to be paid out all entitlements including their notice period, wages, redundancy pay (if applicable) and accrued but untaken annual leave and long service leave.

Stand down and the implications to JobKeeper payment

If someone is stood down, are they free to secure another job in the meantime? 
Answer
That is correct, they can obtain another job without affecting their stand down.

Question
How does someone being stood down and securing a second role affect a JobKeeper payment that their employer may be looking to secure? 
Answer
The legislation, passed on Wednesday, should provide additional information on this point however it is clear that you will only be able to receive JobKeeper from one employer.  As a result, employees who commence employment with a second employer will likely receive their JobKeeper from that employer and therefore no payment would be made from the company that they have been stood down from.

It is anticipated that some employees will be obtaining secondary employment but hoping to claim the full $1500 from their original employer. This is likely to be commented on in the legislation.

More details will be provided once the JobKeeper legislation is passed.

For more information fro the HRIA on how to deal with the Coronavirus crisis, head to the Association’s dedicated resources page: www.HRIA.com.au 

To spea to MST LAwyers directly as part of your HRIA benefits, go to the member services page: https://hireandrental.com.au/member-services/