I Have Been Stood Down Without Pay. Have I Been Effectively Terminated?

22 Feb I Have Been Stood Down Without Pay. Have I Been Effectively Terminated?

Being stood down without pay can be a confusing time for an employee, particularly if the employee has ongoing financial commitments. The uncertainty surrounding being stood down and whether it amounts to a termination can be frustrating for an employee, however there are rules which an employer must follow with respect to standing an employee down.

Being stood down is a statutory right of the employer, under section 524 of the Fair Work Act. Being stood down is not the same as termination. An employer may stand down an employee during a period in which the employee cannot be usefully employed. An employer may only stand down an employee if there is no work available for the employee and that work is of a type that is capable of being performed by the employee. Useful employment is a situation where an employee is put to work in a firm and that work provides a benefit to the organisation. If an employee is not given the opportunity to perform work that is available then the employer is likely to have unlawfully stood the employee down and they may bring an action for unfair dismissal under the Fair Work Act.

Standing an employee down is a temporary arrangement due to the lack of work available. The employee is still employed during the stand down phase, as the employer will have a view to bringing the employee back once the work load increases. In some circumstances this may not be adequate for an employee as the financial burden of not receiving pay can be overwhelming.

Many employees in the current COVID-19 climate have opted to rely on their statutory right to stand down their workforce until conditions improve. It can be frustrating being stood down as there has been no termination and the employee is effectively in limbo until the work returns. A business is not entitled to stand down an employee without pay under the Fair Work Act just because of difficult economic conditions. The employer is entitled to stand down employees if their workplace has been shut down as a result of COVID – 19 government restrictions. Moreover, an employer cannot stand you down without pay if you have contracted COVID – 19.

The Fair Work Act has been amended to allow stand down provision which are related to either:

1. The coronavirus pandemic; or
2. Government directions to business’s aimed at slowing the spread of the coronavirus.

To be terminated, an employer must notify you in writing of the termination and the date it is to take effect. If your employer has decided not to give you any shifts it is likely you have been temporarily stood down. In both scenarios your employer should notify you of these decisions. If your employer is receiving Jobkeeper payments from the government then you cannot be stood down without pay. It is best to seek confirmation form your employer as to whether you are being terminated from work or stood down.

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