Challenging an unlawful stand-down under the Fair Work Act
Section 524 of the Fair Work Act permits an employer to stand down an employee without pay only when the employee cannot usefully be employed because of a stoppage of work for a cause for which the employer cannot reasonably be held responsible. Employers sometimes misuse stand-down provisions. An employee who is stood down unlawfully can apply to the Fair Work Commission for a dispute resolution or seek payment of lost wages.
This is an 8-step workflow for challenging a stand-down under s 524 of the Fair Work Act 2009 (Cth) where the employer's direction to stand down is disputed as unlawful or outside the permitted grounds.
Before you start
- Written notice of the stand-down from the employer (or evidence of verbal direction)
- The employee's employment contract, applicable enterprise agreement, or modern award
- Details of the employer's stated reason for the stand-down
- Payslips showing cessation of pay during the stand-down period
The workflow
Confirm the stand-down provisions apply
Check whether the stand-down is purportedly under s 524 of the Fair Work Act, an enterprise agreement clause, or a common law contractual right. The available remedies differ depending on the source of the stand-down power.
Assess the employer's stated grounds
Analyse whether the employer's stated reason satisfies the s 524 test: there must be a stoppage of work, the employee must be unable to be usefully employed because of that stoppage, and the cause must be one the employer cannot reasonably be held responsible for. Common legitimate causes include natural disasters or equipment breakdown not caused by the employer.
Check for alternative useful work
Determine whether the employee could have been usefully employed in another capacity during the stand-down period. If the employer had alternative duties available and chose not to offer them, the stand-down may be unlawful.
Review the enterprise agreement or award
Check whether the applicable enterprise agreement or modern award has a specific stand-down clause that modifies or supplements the statutory right. Some agreements require consultation before a stand-down, provide for partial payment, or impose time limits.
Calculate the employee's lost wages
Calculate the wages and entitlements lost during the stand-down period, including base pay, penalty rates, allowances, and superannuation contributions. This forms the basis of the compensation claim.
Send a letter of demand to the employer
Write to the employer disputing the lawfulness of the stand-down, setting out the legal basis for the challenge, and requesting immediate reinstatement of pay or return to duties. Set a reasonable deadline for response.
Lodge a dispute with the Fair Work Commission
If the employer does not resolve the matter, apply to the Fair Work Commission under s 526 for a dispute about whether the stand-down was authorised. The FWC can deal with the dispute by mediation, conciliation, or (if agreed) arbitration.
Prepare for the FWC conference or hearing
Prepare submissions and evidence for the FWC conference or hearing. Address whether the employer's stated cause was genuine, whether the employee could have been usefully employed, and whether the employer bears responsibility for the stoppage. Include evidence of lost wages.
What you will have at the end
An FWC determination that the stand-down was unlawful, resulting in payment of lost wages for the stand-down period, or a negotiated resolution including back-pay and return to normal duties.
Common issues
- Employers relying on s 524 for economic downturns, which is generally not a permitted ground
- Not distinguishing between a stand-down under s 524 and a direction to take annual leave
- Failing to check whether the enterprise agreement has a more favourable stand-down clause
- Missing the requirement that the cause must be one the employer cannot reasonably be held responsible for
- Not calculating superannuation losses during the unpaid stand-down period
Run this workflow on a real matter
Quillio analyses the employer's stand-down notice against the s 524 requirements, identifies deficiencies in the employer's justification, and helps draft dispute applications for the Fair Work Commission. See /practice-areas/employment-lawyers or start a free trial.
This workflow is a general guide. Stand-down rights can be modified by enterprise agreements. Always check the applicable industrial instrument before advising on the lawfulness of a stand-down.
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