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Coronavirus – What Do I Do With My Employees?

Coronavirus – What Do I Do With My Employees?

Obviously one of the biggest areas of uncertainty regarding the impacts of COVID-19 is on staff. Our expert Employment Law Team has put together the following overview, regarding standing-down employees and making employees redundant as a result of the current pandemic.

Employee Stand-Down

Pursuant to sections 524 and 525 of the Fair Work Act, employers can stand employees down without pay during a period in which the employee cannot usefully be employed because of:

  • equipment breakdown;
  • industrial action, when it’s not organised by the employer; or
  • (most relevant given the corona virus outbreak) stoppage of work for which the employer cannot be held responsible.

During a legitimate stand down period, employees do not need to be paid but they will accrue leave in the usual way.

Whether a particular employee can be usefully employed is a question of fact to be determined having regard to the circumstances that face the individual employer and the specific employee. “Usefully employed” has not been defined, but Courts have in the past determined that if an employer is able to obtain some benefit or value for work that could be performed by the employee, then the stand down provisions will not apply.

For example, let’s say a local take away shop has to ‘shut its doors’ due to a government lock-down proclamation, then it may be reasonable to stand the front-line employees down without pay, but employees who do accounts, bookkeeping, marketing and alike may not be eligible to be stood down because there may still exist an opportunity for them to be ‘usefully employed’.

Awards, Enterprise Bargaining Agreements and Employment Agreements could alter the statutory position above, so EL always cautions clients against taking an action as drastic as stand down without pay until considered legal advice tailored to that client’s business and the specific employee(s) have been obtained.

Because of the significant impacts stand down without pay can have on employees, EL would treat such a step with extreme caution. Fair Work guides at the moment are saying that ‘best practice’ would be to discuss different options with each employee, and consider letting employees take leave on the basis of paid leave such as sick, annual, long-service etc. where available, or to allow them to work from home where possible.

However, EL recognises that sometimes when there is a stoppage of work, standing employees down without pay may be the only option available to our clients, and in those circumstances we encourage clients to contact us for a tailored, short-form advice from $1,350.00 (including GST).

Redundancy Option

Some EL clients may see their business take such a downturn that they need to consider making employee(s) positions redundant.

Essentially, a redundancy could be a potential strategy for employers where an employee’s position is no longer required by the employer due to restructure or operational changes in the employer’s business, which renders the position unnecessary. The work or role must no longer be required to be performed by any employee.

The Fair Work Act has strict requirements that employers must meet prior to qualifying for the redundancy provisions, and a relevant Employment Agreement, Award or Enterprise Bargaining Agreement may create complimentary and/or additional onerous obligations on employers in this regard.

Given the current climate, EL’s advice is to approach any redundancy decision with caution, and always ensure you have sought tailored legal advice so as to minimise any risk or unnecessary exposure to your business.

Contact Us

Our expert Employment Law team can also assist your business by developing a range of customised and appropriate policies and documents – please contact us to obtain a fixed fee quote for these services. In the interim, our team has prepared a generic Coronavirus Policy for your free download and use, to ensure that your business is on the front-foot.

The application of the existing law to the current situation is rapidly-developing, so we encourage all clients to ensure they regularly check our platforms for updates or to contact us directly with any concerns that they have.

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