Unlawfully stood down worker loses compensation battle

24 November 2021

The Fair Work Commission has refused to award compensation to a hotel worker who would not agree to a temporary reduction in hours, despite finding that she was unlawfully stood down. The Commission maintained she failed to “share the burden of the pandemic.”

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Background 

The staff member was employed on a full-time basis working 38 hours a week.  

The business was forced into a lockdown between 1 and 8 August 2021 and continued to operate using a “skeleton staff” throughout this period. The employee worked two days before being stood down without pay for the remainder of the period.  

Once the lockdown ended, the business continued to operate with a skeleton staff as a consequence of significant reduction in business. The employee’s stand down was extended numerous times with only a few shifts offered and worked.  

On 11, 18 and 19 August 2021, the business contacted the hotel worker to understand if she would be willing to consider a temporary reduction in hours. The employee did not respond and assumed she would revert to full-time hours. 

On 25 August 2021, the employee was notified she would not be rostered if an agreement couldn’t be reached regarding the reduction in hours. Once again, she did not engage. 

On 26 August 2021, the employee’s stand down was extended to 6 September 2021.  

In another attempt, the business wrote to the staff member in relation to working reduced hours, to which she failed to respond. As a result, the business extended the stand down period to 19 September 2021.  

Despite being reinstated on 8 September 2021, the disgruntled employee filed an application with the Commission arguing it was not permissible to stand her down and, as a consequence, she should receive her ordinary rate of remuneration for this period. 

The decision 

When determining whether or not the business was able to rely on section 524 of the Fair Work Act (Cth), an assessment must be made as to whether there has been a stoppage of work which the employer cannot be held responsible for. Relevantly, the Commission confirmed a reduction in available work does not amount to a “stoppage” and that, in such circumstances, a business would not be able to rely on the stand down provisions of the Act.  

The employee conceded the lockdown period amounted to a stoppage of work; however, she also argued the subsequent stand downs were a result of low occupancy rates, not a complete stoppage of work.  

The Commission agreed the subsequent period of stand down failed to meet the requirements of the Act. There was not a complete stoppage. The business was not able to rely on the provision of the Act. However, the Commission considered the precarious situation of the business and its repeated attempts to engage with the employee to find a financially viable solution. The Commission also noted some 258 other staff members had engaged and made arrangements to work reduced hours and share the burden of the pandemic.  

In making its decision, the Commission considered the fairness between the parties and declined to make a monetary order.  

Learnings for business 

A business can only stand down an employee in limited circumstances. Before taking any action to reduce hours or change an employee’s role, it’s vital consideration is given to the Act, as well as any other industrial instruments. 

COVID-19 has reduced work for many organisations. However, when considering how to manage this issue, careful consideration should be given to the business and its employees. 

How the Victorian Chamber can help 

The Victorian Chamber Workplace Relations Advice Line is on hand to provide support and to help businesses understand their minimum entitlements when employing staff. In addition, our Workplace Relations Consultants have a wealth of experience conducting workplace wage audits and providing advice and support to business.   

Received an underpayment claim? Our Workplace Relations Consultants are on hand to help to explain the processes, draft responses and submissions, and represent you in the Fair Work Commission. 

Complete Members have unlimited access to the Helpline as part of their membership and the Workplace Relations Advice Line offers general advice on a range of workplace issues, including: 

  •          Award interpretation, classification and minimum entitlements 
  •          Disciplinary processes, performance management and termination
  •          Personal illness and injury
  •          Parental leave and flexible working arrangements
  •          Redundancy
  •          Occupational Health and Safety and WorkCover.

For assistance on any aspect of your employment obligations, please call the Victorian Chamber Workplace Relations Advice Line on (03) 8662 5222. 

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