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When can employers stand down employees in the COVID-19 pandemic environment?

Libby Pallot, Walter MacCallum, Anthony Massaro, Ben Tallboys, Abbey Burns, Caitlin Walsh, Meena Iskandar, Natasha Sim, Morgan Smithe & Connor Farrell

By now, Australian businesses are all too familiar with the volatility and uncertainty that the COVID-19 pandemic has inflicted on the workplace. In such an environment, with the vaccine rollout still in its infancy in Australia, employers need to know their rights in relation to standing down their employees.

A Full Bench of the Fair Work Commission (FWC) has recently provided guidance on when employees can be stood down in the context of COVID-19 restrictions. Refer to the decision here - [2021] FWCFB 844.

Lessons for employers

The decision confirms that if a State or Territory government were to reintroduce restrictions similar the Stage 4 restrictions adopted in Victoria, or restrictions of similar severity, this would likely constitute a “stoppage of work” for which employers cannot reasonably be held responsible. Such a circumstance would enable employers to at least consider exercising their right to stand down employees under 524(1)(c) of the Fair Work Act 2009 (Cth) (FW Act).

However, a “stoppage of work” alone is not enough to allow employers to exercise their stand down rights. The Full Bench made it clear that for an employee to be legally stood down, they must first be in a situation where they cannot be “usefully employed” during the period of the stand down.

Employers should be aware that an employee who cannot perform their normal duties may still be “usefully employed” if they can perform alternative duties that are of net benefit to the employer. While there will be situations in which employees cannot be usefully employed, these will arise on a case-by-case basis. Employers should also consider ensuring that their letters of offer or employment contracts contain additional rights to potentially stand down employees without pay, should the need arise.

The statutory framework

Section 524(1) requires an employer seeking to stand down an employee to establish that:

  • the employee cannot be usefully employed during the period of the stand down; and
  • this is because there has been a stoppage of work for which the employer cannot reasonably be held responsible.

Background of the case

In the midst of Victoria’s Stage 4 restrictions in August 2020, the School closed its physical operations (with limited exceptions, including to care for the children of essential workers) and moved to remote learning. In doing so, the School stood down three of its employees: two Library Technicians and a Classroom Learning Assistant.

The School’s decision in respect of the Library Technicians, was on the basis that the school library had closed, and the physical borrowing of books had ceased. For the Classroom Learning Assistant, the School decided not to involve the employee in the provision of remote learning, as a means of managing workload. As such, the School could not identify any useful work for the employees to perform during the period of remote learning.

In response, the Independent Education Union of Australia (IEU) lodged an application to the FWC to deal with the stand down dispute.

The decision of Commissioner Bissett

Commissioner Bissett held, in September last year, that the three employees had not been stood down in accordance with section 524(1)(c) of the FW Act and that they were permitted to return to work.

In reaching this decision, the Commissioner first considered whether there had been a stoppage of work in accordance with the FW Act.

The Commissioner noted that teaching had not ceased, and had simply transitioned from the classroom to online. The Commissioner was not satisfied that the role of the Classroom Learning Assistant was affixed to the physical space that the employee worked in. Further, whilst the school library had closed and the physical borrowing of books had ceased, students and teachers were still able to access the online library, and utilised this educational resource during the School’s on-site closure.

As such, Commissioner Bissett found that there was no stoppage of work, and that the business of the School, being to provide education (and not ‘on site’ education), continued throughout the Stage 4 restrictions.

Given this, Commissioner Bissett did not consider it necessary to determine the other limbs of stand down test.

The Full Bench appeal

The Full Bench held that in the assessment of whether an employee can be stood down in situations involving stoppages of work, the first question to ask is whether the employee can be usefully employed over the relevant period.

No ruling was made on whether the employees in this case could have been usefully employed. However, the Full Bench outlined that if an employee can no longer perform their normal duties, they may still be “usefully employed” if alternative duties of net benefit to the employer are available to be performed.

If an employee cannot be “usefully employed” the second question to be asked is whether this has been caused by a stoppage of work, and if so, whether the employer can be reasonably be held responsible for that stoppage.

The Full Bench explained that a “stoppage of work” could occur in a diverse range of circumstances and may occur in a different part of the business than the part in which the relevant employees work. In this case, the normal operation of the School involved performance of work in the physical locations of its library and classrooms. This work had stopped as a direct result of Stage 4 restrictions which, in the opinion of the Full Bench, clearly constituted a “stoppage of work” for which the School could not be held liable.

The Full Bench accepted that in this respect, Commissioner Bissett had erred in her original decision. However, the Full Bench still refused permission to appeal as there was no utility in the appeal now that the relevant employees had returned to work.

How we can help

It can be difficult to interpret the provisions of the FW Act and to understand your rights and the rights of your staff. Please contact Russell Kennedy’s Workplace Relations, Employment and Safety Team for advice regarding your stand down rights under the FW Act.

If you would like to keep in touch with Alerts and Insights from our expert Workplace Relations, Employment and Safety team, you can subscribe to our mailing list here.

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