Prime Minister Julia Gillard yesterday announced her decision to stand aside parliamentary speaker Peter Slipper until the serious allegations against him are resolved. Slipper will retain his full $323,750 salary package while the claims are pursued. In the business world, when do employers have to foot the bill during stand-downs?
According to the Fair Work ombudsman, employers must first distinguish temporary shutdowns from the workplace law on stand-downs. The circumstances are treated very differently under workplace law, and employers can temporarily shutdown their workplace (or sectors of their workplace) during traditionally slow business periods, such as between Christmas and New Year, and dependent on the modern award or enterprise agreement in place, require employees to use some portion of annual leave. Stand-downs are distinct from shut downs in that under the Fair Work Act 2009, and employers can lawfully stand-down an employee without pay if they can't be employed:
when there’s industrial action (unless the employer organised or is involved in the industrial action)
when machinery or equipment has broken down and the employer cannot reasonably be held responsible for the breakdown
when work stops for reasons the employer can't be held responsible for, such as a natural disaster
If an enterprise agreement, transitional instrument, or contract of employment allows it, an employer might be able to stand down employees when they can’t be usefully employed in other circumstances. These instruments may also contain additional requirements, such as the employee being given notice of the stand down.
Do employers have to pay during stand-downs?
In some circumstances, an employer can stand-down an employee without pay.
Under the Fair Work Act, an employer can stand-down employees when work stops for a reason that’s outside their control.
During a stand down, while the employee is still employed by the business, they aren’t required to work and therefore in most circumstances, aren’t entitled to be paid. However, modern awards and agreements may also have their own stand down provisions – so it’s important to check if there are any other rights or obligations.
When an employee is stood down, the employer is not required to make payments to the employee for the stand down period unless the employee is covered by a contract, transitional instrument, or agreement that states the employer must pay the employee during the stand down. If the stand down provisions don’t apply then an employee is entitled to be paid wages – even if they aren’t working.
What about leave?
If an employee is stood down or if a business temporarily shuts down, the employee's leave (annual leave, personal leave, etc.) continues to accrue.
An employee may agree to take paid leave during a stand down, rather than not being paid at all for the time.
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