We have been receiving many queries from clients regarding their inability to continue employing staff due to a severe downturn in trade.
The following information is provided to inform you of your rights as an employer in these very difficult circumstances. Please note that the following are the minimum entitlements of employees. If you are in a financial position to offer paid leave in addition to that discussed below then you are able (and encouraged by the Government) to do so.
If you are unable to “gainfully employ” staff during a period then you can “stand down” your employees for the duration of the emergency. This means that you do not have to “make up” work that would ordinarily not be performed, or provide work that does not contribute profitability to the business. So if you are a mechanical services business, you are not obligated to roster your staff to clean tools or sweep floors if this is not something that you ordinarily do, and there is no return to the business.
If they are casual, then they are not entitled to any pay.
Whilst a full time or part time employee may request payment of annual leave or long service leave during such a period, there is no obligation on an employer to grant the request. Just consider, if you have 20 staff and all of them want to take annual leave for the entire period of a lockdown (which could extend for some weeks or months), do you have the financial resources to pay? If you do have such a capacity, then we would encourage to you offer the annual leave pay. If you do not, you are under no legal obligation grant the leave.
If there is a “shutdown” of schools, kindergartens or childcare services and your staff must stay home to look after their children, they will be entitled to be paid Carer’s Leave which is drawn from their Personal Leave accrual. This is because such leave is available to provide care to an immediate family member (and a member of their household) in the case of an “unexpected emergency” as well as when the family member (or a member of their household) is sick.
There is no time limit on the stand down provisions in the Fair Work Act. This means that if the current emergency continues for a period of months, so does the stand down.
A further consideration is that you can combine a period of stand down with accrued leave. You are able to stand staff down for a portion of the week (or day) and offer them the opportunity to take annual leave or long service leave for the remaining week (or day). Standing staff down is not an “all or nothing” proposition.
It is also important to note that your employees are able to seek alternative employment during the period of the stand down and this does not affect their employment with you in any way. They still continue to be employed and when you return to operation as normal their continuity of employment is not broken. Please also note that leave entitlements are not accruing during a period of stand down.
As stated above, these are the minimum entitlements and obligations available to employees and employers. You are able to offer conditions above those stated, however please consider carefully your ongoing financial viability before making any decisions.
Please contact our office if you have any queries.
