Difference between stand down, unpaid leave & shut down

The JobKeeper scheme ended on 28 March 2021. The information in this article about the JobKeeper scheme stopped applying from 29 March 2021. Other content continues to apply.

While businesses and employees adjust to the JobKeeper scheme ending, information about the rules that applied during the JobKeeper scheme continues to be available. This is so you can continue accessing this information for historical and other purposes.

Find out more at Former Jobkeeper scheme.

A stand down without pay under section 524 of the Fair Work Act, an enterprise agreement or employment contract is different to unpaid leave. It is also different to a shut down, or a direction to reduce hours or days of work under a JobKeeper enabling stand down direction.

They’re used for different reasons, and affect certain entitlements under the Fair Work Act differently.

General stand down, JobKeeper enabling stand down directions, unpaid leave and shut down are all explained below.

Stand down

There were 3 kinds of stand down under the Fair Work Act:

  • a stand down by an employer under section 524 of the Fair Work Act, an enterprise agreement or employment contract (general stand down)
  • a JobKeeper enabling stand down direction by a qualifying employer under section 789GDC [repealed] of the Fair Work Act
  • a JobKeeper enabling stand down direction by a legacy employer under section 789GJA [repealed] of the Fair Work Act.

The JobKeeper scheme ended on 28 March 2021. The information in this article about the JobKeeper enabling stand down directions stopped applying from 29 March 2021.

Employers can still stand down employees under section 524 of the Fair Work Act, an enterprise agreement or a contract of employment (general stand down).

General stand down

Employers can tell employees not to work if their employees can’t usefully be employed for reasons outside the employer’s control. Reasons outside the employer’s control include things like equipment breakdown, industrial action, a complete stoppage of work because of a government shutdown or severe and inclement weather. This is called stand down.

This is different from an employee taking unpaid leave and a JobKeeper stand down. It is also different from a shut down.

A general stand down is initiated by the employer and may affect multiple employees.

During a general stand down, employees:

  • don’t work
  • don’t have to be paid
  • stay employed.

Different or extra rules may apply to standing down employees under an enterprise agreement or employment contract.

JobKeeper stand down (stopped applying on 29 March 2021)

Qualifying employers

Under the temporary JobKeeper provisions in the Fair Work Act, qualifying employers could direct an eligible employee to reduce their hours or days of work (including to no hours) in certain circumstances. This was called a JobKeeper enabling stand down direction.

This is different to general stand down and unpaid leave. It is also different to a shut down.

A JobKeeper stand down given by a qualifying employer:

  • could only be given by qualifying employers to employees while they were eligible for the JobKeeper scheme
  • was initiated by the employer
  • required an employer to first notify, and consult with, employees or their representatives (along with other safeguards as set out in the Fair Work Act)
  • could affect one or more employees.

During a JobKeeper stand down given by a qualifying employer, employees:

  • may have worked some or no hours
  • were paid the higher of the following amounts, each fortnight:
    • the amount of the applicable JobKeeper payment, or
    • their usual pay for work performed (including payments for any paid leave, penalty rates and public holidays)
  • stayed employed.

See Pay & the JobKeeper scheme for more information about how an employee was paid under the JobKeeper scheme.

Legacy employers

Under the temporary JobKeeper provisions in the Fair Work Act, legacy employers could direct employees who they previously received JobKeeper payments for, to reduce their hours in certain circumstances. This was called a JobKeeper enabling stand down direction. The direction could only start on or after 28 September 2020. JobKeeper enabling stand down directions stopped applying by 29 March 2021.

This is different to general stand down and unpaid leave. It is also different to a shut down.

A JobKeeper stand down given by a legacy employer:

  • could only be given by legacy employers to employees who they previously received JobKeeper payments for
  • was initiated by the employer
  • required an employer to first notify, and consult with, employees or their representatives (along with other safeguards as set out in the Fair Work Act)
  • could affect one or more employees.

However, a JobKeeper enabling stand down given by a legacy employer couldn’t:

  • result in an employee working less than 2 hours on a work day
  • reduce a full-time or part-time employee’s hours of work to less than 60% of their ordinary hours as at 1 March 2020 (their ordinary hours before the impact of coronavirus).

Legacy employers needed to follow certain rules where it wasn’t possible or appropriate to determine an employee’s ordinary hours of work as at 1 March 2020.

During a JobKeeper stand down given by a legacy employer, employees:

  • may have worked reduced hours
  • were paid their usual pay for work performed, including payments for any leave, penalty rates and public holidays
  • didn’t have to be paid for the hours they didn’t work
  • stayed employed.

More stand down information

Pay during inclement or severe weather & natural disasters has information about when an employee can be stood down during severe weather or natural disasters.

Stand downs has information about when an employee can be stood down.

Stand down of employees & continuous service has information on how stand down affects employees’ entitlements.

Ending employment during a stand down has information on notice and pay in lieu of notice during a stand down.

Stand down during coronavirus has information on stand down for businesses affected by the coronavirus outbreak.

JobKeeper enabling stand down directions has information for qualifying employers on directions to temporarily reduce eligible employees’ hours or days of work, including to zero, due to business changes attributable to coronavirus.

Pay & the JobKeeper scheme has information for qualifying employers about how an eligible employee is paid under the JobKeeper scheme.

JobKeeper enabling directions and agreements for legacy employers has information on directions to temporarily reduce employees’ hours in certain circumstances.

Unpaid leave

Employees can take periods of unpaid leave with the agreement of their employer. For example, an employee may take a period of unpaid leave to travel if their employer agrees, or they may take unpaid sick leave if they’re unwell and have run out of paid sick leave.

Unpaid leave is usually initiated by the employee and only affects that individual.

It is different from employees being stood down without pay by their employer. It is also different from unpaid pandemic leave, which has been inserted for a short time into many modern awards.

More unpaid leave information

Changes to workplace laws during coronavirus has information on short-term changes to awards due to the impact of coronavirus on workplaces. Some temporary changes stopped applying in 2020 while others may continue to apply in 2021.

Unpaid leave & continuous service has information on how unpaid leave affects employees’ entitlements.

Unpaid pandemic leave & annual leave changes to awards has information on unpaid pandemic leave.

Shut down

A shut down is when a business chooses to temporarily close down all or part of a business for a particular period, such as Christmas and New Year. A shut down is also known as a close down.

During a shut down, employees can be directed to take annual leave if:

  • their award or agreement allows it, or
  • they aren’t covered by an award or agreement.

More shut down information

Direction to take annual leave during a shut down has information about leave during a shut down.

Payment for hours not worked has information about payment during a shut down.

Direction to take leave when an employer shuts part of a business has information about leave during a shut down.

View references

Fair Work Act 2009

  • section 524 allows employees to be stood down without pay in certain circumstances
  • section 789GDC [repealed] allowed qualifying employers to give certain directions to eligible employees
  • section 789GJA [repealed] allowed legacy employers to give certain directions to employees they were previously entitled to receive JobKeeper payments for.

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