Stand down orders in Covid

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n addition to the powers employers have during the Covid pandemic to issue Jobkeeper enabling directions to employees who the employer has nominated for the Jobkeeper subsidy, the Fair Work Act contains a general power in section 524 for employers to stand down employees in certain operational circumstances irrespective of whether the employee or employees concerned have been nominated by their employer for the Jobkeeper subsidy. Additionally the Act contains a power for the Fair Work Commission to deal with disputes about such stand downs and here is an extract from a decision in just such a recent case on this very point.

“Consideration

[17] Under s.524 of the Act, an employer may stand down an employee during a period in which the employee cannot usefully be employed because of one of the three circumstances outlined. In this case, it is only s.524(1)(c) that is relevant and the Respondent’s position rests on the acceptance of its proposition that Mr Collis cannot usefully be employed because of a stoppage of work due to a cause for which it cannot reasonably be held responsible.

[18] The significance of an employer standing down an employee is that the employer is not required to make payments to the employee for the period of the stand down (s.524(3)). This is the focus of Mr Collis’ application.

[19] Mr Collis challenges the basis of the stand down that has been invoked by the Respondent. He says he has been available to work throughout and claims his full rate of pay since 8 July 2020. In effect, Mr Collis seeks a decision that determines that he has been stood down since 8 July 2020 in a manner that does not comply with s.524 of the Act. Deputy President Colman outlined in Construction, Forestry, Maritime, Mining and Energy Union v DP World Melbourne Ltd 1 why this is not within the Commission’s power:

“Such a decision would be declaratory in nature. It would purport authoritatively to determine whether the company had a legal justification not to pay employees based on s 524 of the Act. Such a decision would require the exercise of judicial power.” 2

[20] The Deputy President also referred to the decision of the Full Bench in Bristow Helicopters Australia Pty Ltd v AFAP (Bristow Helicopters). 3 I agree with the Deputy President’s summation of Bristow Helicopters and his characterisation of it as a useful illustration of the Commission’s power under s.526 of the Act:

“In Bristow Helicopters Australia Pty Ltd v AFAP, a Full Bench of the Commission overturned a decision that had determined that an employer had contravened s 524. Pursuant to the decision, orders had been issued requiring the employer to treat the stand downs as null and void and to pay the affected employees their wages for the relevant period. The Full Bench held that these orders were beyond power, and referred to the decision of Gibbs CJ in R v Gough; Ex parte Key Meats Pty Ltd, where his Honour affirmed that the Commission’s predecessor had no jurisdiction to determine the legal rights of employees who had been stood down, or to enforce their award rights. The Full Bench upheld a different order made by the Commissioner, which had required that the employer withdraw the stand downs and, prospectively, allow employees to return to work. This order was permissible, as it created new rights and obligations and involved the exercise of arbitral power.” 4 (references omitted)

[21] Applying this analysis to the matter before me, it is not within my power to make orders that Mr Collis seeks that would declare the stand down implemented by the Respondent from 8 July 2020 to date void and order the Respondent to pay Mr Collis his wages for this period. Only a Court may make such orders.

[22] It would, however, be within my power to order that the Respondent withdraw the stand down of Mr Collis prospectively, so as to allow him to return to work.

[23] Restrictions under State 4 COVID-19 restrictions for the Construction sector were implemented by the Victorian Government, effective 11:59pm on Wednesday 5 August 2020. Following this, there were subsequent discussions between the Victorian Government and employer and employee representatives from the Construction sector. The website of Business Victoria currently provides guidance material for the Construction sector under State 4 restrictions and defines ‘permitted work premises’ in the Construction sector as follows:

  • Building and non-building construction (including residential).
  • Construction of critical and essential infrastructure and services to support these projects, and other construction in line with restrictions.
  • Critical repairs to any premises, are allowed, where required for emergency or safety.

[24] The Business Victoria website currently outlines that from 11:59 am on Saturday 8 August 2020, a number of changes need to be adopted by all Melbourne construction sites, including:

1) no more than one worker per four square metres of enclosed workspace is allowed.

2) All employees, supervisors and specialist contractors (which include plumbers) are required to limit movement between multiple sites (no more than three sites per week).

3) Each small-scale construction site is to reduce the number of people on-site to five people plus a supervisor at any one time and limit movement of workers between different sites where possible (no more than three sites per week).

4) Each large-scale construction site is required to limit the daily maximum number of workers on site to the higher of:

  1. 25% of their baseline workforce (the average daily number of workers on site across the project lifecycle, as derived from the project’s resourcing plan as at 31 July 2020); and
  2. 5 workers.

[25] A small-scale construction site is defined as a construction site that does not meet the definition of a large scale construction site. A construction site is considered large scale if it is:

  • Permitted to be (at completion) more than three storeys high (excluding basement); or
  • Larger than 1,500m2floor size; or
  • Any office or retail fit-out; or
  • Industrial, large format or retail use.

[26] Mr Ristevski and Mr Hogarty gave evidence regarding the restrictions imposed from 11.59pm on Wednesday 5 August 2020, the impact they were having on the operations of the Respondent and its capacity to provide work for its plumbing crew. As things stand, the Respondent is securing no new work. Further, its capacity, and that of its plumbing crew, to perform existing work is at the discretion of builders managing the construction projects and access to this work is impacted by the Victorian Government COVID-19 restrictions. I am satisfied on the evidence before me that Mr Collis cannot currently be usefully employed because of a stoppage of work due to these (now updated) Government imposed restrictions in the sector in which the Respondent operates and that the Respondent cannot reasonably be held responsible for this stoppage. As such, I am not persuaded to make an order that the Respondent withdraw the stand down of Mr Collis, so as to allow him to return to work.

[27] Mr Collis has neither worked nor been paid since 8 July 2020. I accept that he has been the only employee of the Respondent to be stood down for the entire period since 8 July 2020 but I observe that this is of his own choosing because he himself made the decision not to go onto the rotating roster. I also observe that Mr Collis has also elected not to take any of his accrued annual leave since 8 July 2020. These two options remain open to him and of course should the circumstances affecting the Construction sector and the Respondent’s business change, it is open for him to make another application pursuant to s.526 of the Act if he remains stood down and disputes such a state of affairs.

[28] However, having regard to the circumstances before me and for the reasons stated, the Application is dismissed.”

Collis v SPI Plumbing (Australia) Pty Ltd (2020) FWC 4196 delivered 10 August 2020 per  Clancy DP