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This letter can be used by employers to notify their employees that the business is being closed and employees are temporarily being stood down, as a result of the Coronavirus Pandemic/COVID-19.
Australian employees may be "stood down" under the Fair Work Act 2009 (Commonwealth) if they cannot be usefully employed because of a stoppage of work for any cause for which the employer cannot reasonably be held responsible. Employees that are stood down remain employed during the period of the stand down, although the employer may not be required to pay them during the period of the stand down.
If an employer is proposing to stand down employees, it is important that the employer makes sure there has actually been a "stoppage of work" and the employer "cannot reasonably be held responsible" for the stoppage, in accordance with the Fair Work Act. A mere downturn in work is not sufficient.
For example, if the government has ordered that the employer shuts their business, this might qualify as a stoppage of work, the cause for which the employer cannot reasonably be held responsible. But if there has just been a reduction in revenue, so the employer is having to cut back on staffing costs, this may not qualify. As a result, the "stand down" provisions under the Fair Work Act might not apply, meaning that the employer might still be required to pay staff salaries/wages.
However, every employer is different, so if there is any doubt, seek legal advice.
Enterprise agreements, awards, and employment contracts can have different or extra rules about when an employer can stand down an employee without pay. For example, these might require employers to follow a particular process of notifying or consulting with employees.
If employers stand down employees unlawfully, then the employer may be penalised, including by having to reimburse the employees for unpaid wages.
Recent amendments to Australian workplace laws, in response to COVID-19/Coronavirus
On 8 April 2020, the Fair Work Commission made determinations varying a number of Australian employment awards. Among these variations, for many employees, these changes now provide for 2 weeks of unpaid pandemic leave, and the ability to take twice as much annual leave at half their normal pay if their employer agrees.
In addition, on 9 April 2020, the Fair Work Act was amended to support the implementation and operation of the JobKeeper wage subsidy scheme. This allows eligible employees to receive a fortnightly payment of $1,500 (before tax) through their employer. Further information is available from the Fair Work Ombudsman and from the Australian Treasury. This scheme is useful for many employers who are standing down employees, as it enables them to ensure that their employees still receive some income during the stand down period.
How to use this document
This situation is changing rapidly. Before preparing this letter, it is a good idea to check for up-to-date information from authorities such as the World Health Organisation, the Australian Government Department of Health, or Safe Work Australia.
This document should be completed and signed by the employer or an authorised member of staff and either posted, emailed or delivered directly to employees.
It is good practice to keep a copy of this letter in the file of each employee it is sent to. Employers may also wish to have employees confirm receipt of this letter once it is issued to them.
The Fair Work Act applies the National Employment Standards (NES), which are a set of minimum employment standards in Australia. The rules regarding standing down employees are set out in the Fair Work Act.
In addition, each state and territory has legislation that deals with various employment matters such as occupational health and safety or discrimination.
This letter does not take into account the requirements of modern awards or enterprise agreements. If such an award or agreement applies, then that may set out some additional minimum standards with which the employer must comply.
General principles of contract law, as provided by the common law, may also apply.
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