Coronavirus shutdowns: what are your employer obligations?

According to Ed Mallett, managing director of leading employer advice service Employsure, in a Government imposed closure of a workplace, employers may be able to stand staff down without pay if they can’t be transferred to work in other parts of the business.

“This is an incredibly confusing time for employers,” Mallett said.

“The conversation has evolved so drastically in the past few weeks and business owners are finding it hard to keep up. We’ve gone from talking self-isolation and remote working to complete workplace shutdowns. And the entitlements that apply in all of those scenarios are incredibly vast and complex.

“Employers are doing their best to meet an unprecedented challenge. There’s a huge amount of pressure on their business, but they’ve also got employees to think about and legal obligations they must fulfil.”

Mallett said the Government announcement of forced closures to minimise the spread of COVID-19 may allow employers to access little known conditions in the Fair Work Act.

“If you are ordered by the Government to fully shut down, and your employees can’t reasonably work elsewhere, you may be in a position to stand them down without pay,” Mallett said.

“The employer needs to be able to show that it is a legitimate stoppage of work, and not just a downturn. This certainly appears to be a legitimate stoppage for many businesses, meaning that unpaid stand down provisions in the Fair Work Act may well apply given the circumstances.

“The requirements under the Fair Work Act mean that unpaid stand downs apply when an employee cannot usefully be employed. However, an employer must show that all steps were taken to find useful employment for the affected employees.

“This doesn’t mean an employer is bound to place employees in positions that are drastically different to their contracted position or significantly change the way they operate the business.

“However, prior to standing down an employee, you should consider any consultation and notice requirements.”

Stand-downs: 5 Questions Employers Must Ask

• Are there stand down provisions in the Modern Award, Enterprise Agreement or Contract of Employment?
• Can you establish causation? Is the Coronavirus (COVID-19) the real reason for the stoppage of work?
• Has there actually been a stoppage of work? By definition, this must be more than a downturn.
• Are there other opportunities for the employee to be usefully employed?
• Is the Employee on a period of authorised leave (paid or unpaid)? If so, they are not taken to be stood down.

If an employer cannot satisfy these requirements, the decision to stand down employees may be challenged by way of Application to the Fair Work Commission. The onus of proof falls on an employer to show that the unpaid stand down was legitimate and they fulfilled each of the steps outlined above.