How to stand down employees fairly, legally and with compassion

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Recent government decisions and a decline in demand/supplies, has quickly moved many of us from infection control and social distancing, to how do we keep our businesses afloat. The majority of our conversations with businesses this week has been around how and when to stand down staff. Never an easy discussion or decision for any business owner or leader.

The virus does not give us a leave pass from the law, there are still steps we need to follow. We have a legal and moral obligation to do the right thing by our staff. At some point the pandemic will end and (most) of our businesses will return to normal trading. How we take care of our staff during this difficult period, will impact the trust and culture within our businesses moving forward.

WHAT IS ‘STAND DOWN’?

We hear the terms, stand down, leave without pay and redundancy and assume they are one in the same, but they are quite different.

Stand down – staff remain as employees, all other employment rights continue to apply, except the right to work and be paid. Importantly, leave continues to accrue while they are stood down. Under the Fair Work Act 2009 (Sect 524), you can stand down an employee during a period in which they cannot be usefully employed, in this case due to a stoppage of work for a cause for which you cannot reasonably be held responsible. Some enterprise agreements or contracts may also have stand down clauses and these need to be considered.

Leave without pay (LWOP) – is rarely covered in a modern award or enterprise agreement and is not a statutory entitlement. It is therefore an absence granted at the discretion of the business. Situations where you might apply it include: self-isolation and is not sick, government directed isolation and is not sick, or is stuck overseas. Please note you may offer annual or LSL leave as an alternative, if they have adequate leave balances.

Redundancy – where stand down and LWOP are temporary, redundancy is permanent. If at any stage it becomes clear that you will no longer require the person’s job to be performed by anyone because of the changes in operational requirements for your business, you may make their role redundant. There are requirements in relation to consultation and termination pay.

WHAT DO I NEED TO CONSIDER?

Before making the decision to stand down some or all of our employees, there are five questions we must ask ourselves:

Stand Down Employees Checklist

Once we’ve satisfactorily answered the questions above, we can be confident to proceed with stand down. Below are the three most common scenarios we are seeing and how to manage them:

Scenario 1: Closure of Business (partial or full) due to government order or direction

  • Determine your workforce options: are there essential staff who can/need to continue to work onsite and what measures can you put in place to protect them; are there staff who can work remotely/from home; do employees have adequate leave balances; and can some/all staff work at reduced hours/shifts.
  • Meet with staff (where possible) to advise them of the shutdown. Given government orders are usually at short notice, this meeting will be both your consultation and notice period.
  • Advise staff of their rights and entitlements, including their right to access annual or long service leave (at full or part pay), and available government incentives.
  • Provide details about how you will communicate/provide support during the closure period.
  • Follow up your communication in writing.

Scenario 2: Closure of Business (partial or full) due to a lack of demand or supplies

  • Determine your workforce options: are there essential staff who can/need to continue to work onsite and what measures can you put in place to protect them; are there staff who can work remotely/from home; do employees have adequate leave balances; and can some/all staff work at reduced hours/shifts.
  • Meet with staff (where possible) to advise them of possible Discuss with them possible options and listen to their ideas. This is your consultation meeting.
  • Once a decision has been made, meet with staff again to advise of the shutdown.
  • Advise staff of their rights and entitlements, including their right to access annual or long service leave (at full or part pay), and available government incentives.
  • Provide details about how you will communicate/provide support during the closure period.
  • Follow up your communication in writing.

Scenario 3- Closure of Business (partial or full) due to positive case of COVID-19

  • The employee with COVID-19 is on immediate sick leave (or leave without pay for casuals).
  • Employees who cannot work because they have had contact with the infected employee and are deemed to be potentially infectious, must be self-isolating for 14 days.
  • If they are stood down and are fit and willing to work, this will be on full pay. Look for opportunities for them to work from home, where possible.
  • Follow up your communication/arrangements in writing.

ALTERNATIVE OPTIONS

Special Leave

For casual employees or those with low leave balances at the time of being stood down, some businesses are offering what is being termed ‘special leave’. This paid leave is on top of any other leave entitlements, ensuring that vulnerable staff have access to a period of paid leave. As this is a discretionary entitlement, there is no set amount, however we are commonly seeing balances between one and two weeks being offered. Where businesses are unable to fund this leave themselves, they are considering government incentives. For more information on incentives: https://treasury.gov.au/coronavirus/businesses

Leave in Advance

Qantas, together with many local businesses, are offering employees access to their annual leave and/or long service leave in advance. Again, the amount varies, however most are offering between one and four weeks.

 

This may be one of the most difficult decisions you have had to make during the life of your business. There has never been a more important time for us to show leadership, compassion and understanding.

 

If you would like to discuss any of this or if you need further advice, please contact either Claire Huntington on 0429 843 433 or Emma Baldwin on 0439 277 841.

 

Claire Huntington has over 15 years’ experience in senior and executive level human resource management and strategic leadership positions. Claire learnt HR under the wings of great mentors and through trial and error. She has a very practical hands-on approach to HR and management, and isn’t afraid to look outside the box. Claire is also mum to three school aged firecrackers and is an avid photographer in her spare time.

Emma Baldwin is a seasoned human resource business partner, who strives to build trust and respect in every workplace. As a generalist, Emma’s experience spans the full range of human resources including: compliance, mediation, investigation, conflict resolution, employee training and recruitment. Outside of work, Emma enjoys exploring the great outdoors, health and fitness, theatre productions and spending time with her young family.

Find more useful information and advice at www.inspirehq.com.au or by following Emma on LinkedIn or Claire on LinkedIn

Disclaimer: The material contained in this publication is of a general nature only. It is not, nor is intended to be, legal advice. If you wish to act based on the content of this publication, we recommend that you seek professional advice.

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