Temporary shut downs are different from stand downs. The occasions and reasons are different and they are treated differently under workplace law.
Shut downs
An employer can temporarily shut down their workplace during traditionally slow business periods, such as between Christmas and New Year.
The terms of a modern award or enterprise agreement may allow an employer to require an employee to take paid annual leave during such a period. However, the requirement must be reasonable.
An employer may also require an award/agreement free employee to take a period of paid annual leave, but only if the requirement is reasonable.
In determining whether a requirement to take annual leave is reasonable, the following factors may be relevant:
- the needs of both the employee and the employer's business
- any agreed arrangement with the employee
- the custom and practice in the business
- the timing of the requirement or direction to take leave
- the reasonableness of the period of notice given to the employee to take leave.
Standing down employees
An employer can stand down an employee under the Fair Work Act 2009 without pay if they can't usefully be employed:
- when there's industrial action (unless the employer organised or is involved in the industrial action)
- when machinery or equipment has broken down and the employer cannot reasonably be held responsible for the breakdown
- when work stops for reasons the employer can't be held responsible for, such as a natural disaster.
If an enterprise agreement, transitional instrument, or contract of employment allows it, an employer might be able to stand down employees when they can’t be usefully employed in other circumstances. These instruments may also contain additional requirements, such as the employee being given notice of the stand down.
When there's a dispute about a stand down
If there is a dispute about a stand down under the Fair Work Act 2009, an application can be made to Fair Work Australia to deal with the dispute. An application can be made by:
- an employee who has been, or is going to be stood down under the Fair Work Act 2009
- an employee who has made a request to take leave to avoid being stood down and whose employer has approved that leave
- a union who is entitled to represent the industrial interests of the employees described above, or
- a Fair Work Inspector.
What happens to pay and leave?
If an employee is stood down or if a business temporarily shuts down, the employee's leave (annual leave, personal leave, etc.) continues to accrue.
When an employee is stood down, the employer is not required to make payments to the employee for the stand down period unless the employee is covered by a contract, transitional instrument, or agreement that states the employer must pay the employee during the stand down.