For clients in South Australia, today’s news of a full lockdown has come as a shock. For businesses, questions arise as to what this means for employees.
Note: the below information is general in nature and relates solely to the ‘default’ stand down provisions set out in the Fair Work Act 2009. Employees who are covered by a contract of employment or enterprise agreement that provides differently may have different entitlements.
An employer may stand down an employee in circumstances where they are not able to be usefully employed – relevantly – due to causes beyond the employer’s control. A government enforced total lockdown affecting a business comfortably meets the test of a cause beyond the employer’s control. However, before making the decision to stand a person down, consideration must be given to whether or not the person can be “usefully employed”. This is an area that requires some consideration.
There is limited case law on what is meant by ‘usefully employed’ although the general rule of thumb is that the benefit received from the work must be more than the cost of paying the person to do so. Similarly, an employer is not required to substantially reorganise their workplace to create useful work. In most cases, this assessment will be obvious. For example, the closure of building sites makes it unlikely that on site workers would be able to be usefully employed. However, where work from home is available, consideration needs to be given to whether and, if so, how much, valuable work a person can perform. An employee required to process payroll may be able to be usefully employed to do this but if no work is performed, the following week may not be able to be usefully employed. A case by case assessment is required for unilateral stand down.
Employees are taken to not be stood down when they are on a period of authorised leave or other absence. It is generally accepted that an employee should be able to access accrued annual leave, long service leave or rostered days off unless there is good reason for them not to. Note that subject to specific provisions in awards/enterprise agreements or contracts of employment, an employee cannot be ‘forced’ to take a period of leave – it must be by agreement. Specific advice should be sought before issuing any direction to take leave or any refusal to grant a period of annual leave. Access to sick leave is generally not available although this is complicated, and specific advice should be sought.
Where there is an agreement between employees and employers (eg. an agreed stand down, or period of leave), many of the complexities outlined above can be overcome or minimised. As a result, it is strongly recommended that clients aim to work cooperatively with staff to make suitable arrangements, especially for the next 6 day period. For the most part, employees will have similar concerns such as child minding etc. which they will need to accommodate. These arrangements should be recorded in writing, such as a brief email. Although there is the ability to reach agreement employers should bear in mind that this is not ‘carte blanche’ and employment laws still apply. Accordingly, advice should be sought in relation to any specific agreement.
Employees who are stood down are not entitled to be paid, but will continue to accrue leave entitlements as usual. Employers who engage daily hire employees may consider terminating daily hire engagements although specific advice should be sought before taking this step as it is a termination of employment.
It is hoped that this is the end of the process but no-one can predict the future and should lockdown continue to affect your business after that time, it is also strongly recommended that employers revisit these arrangements regularly – perhaps weekly, or sooner if circumstances change.
Note that for employers who are currently on Jobkeeper, an employer would also need to pay the Jobkeeper amount. It is also noted that the effect of this lockdown may also entitle employers to Jobkeeper amounts and it is recommended that businesses discuss this with their accountant.
Disclaimer: the information above is general in nature only and specific advice should be sought in relation to a business’ specific circumstances. It is noted that awards, enterprise agreements and contracts of employment can impact on the above matters.
Note: the Fair Work Lawyers office will remain open (remotely) throughout this time and be able to respond to client queries. The contact details for our solicitors are:
Tom Earls 0409 939 010 firstname.lastname@example.org
David Putland 0419 839 125 email@example.com
Emma Avey 0413 474 428 firstname.lastname@example.org
Ethan Callan 0431 557 350 email@example.com
Sara Pekmez 0479 177 685 firstname.lastname@example.org