Stood down employees: Are they entitled to paid leave during COVID-19? June 24, 2020

As the COVID-19 pandemic sent Australians into lockdown, thousands of workers were stood down. But there were questions over their paid leave entitlements

After Federal and State Government COVID-19 restrictions were imposed in mid-March 2020, four workers’ unions tested the workforce stand down laws in the Federal Court of Australia.

The Court found that employees who are lawfully stood down are not entitled to sick leave, carers leave or compassionate leave.

Background to the Court’s decision about stood down employees

In mid-March 2020, Qantas announced that it would stand down approximately 30,000 employees. In doing so, it relied on its Enterprise Agreement and the Fair Work Act (the Act).

Qantas said it wasn’t required to pay the employees any sick leave, carers leave or compassionate leave entitlements.

On behalf of the employees, four workers’ unions banded together to dispute this decision in the Court. There were two separate cases (or proceedings), but the Court heard them together.

The unions argued that:

• The law allowed employees to access sick leave, carers leave or compassionate leave even when stood down
• The law said that employees were not stood down if they were authorised to be absent from work

The Court’s Findings

Both parties agreed that the stand-down was lawful. The Court used this as a starting point and took into consideration the economic impact and financial relief that the stand-down provided for Qantas.

It also decided that when employees took sick leave or carers leave, they were taking leave from their normal employment responsibilities. This meant that the leave entitlements could be characterised as a form of income protection. The Court accepted Qantas’s submission that

…income is not being protected if there is no available or required work from which to derive income in the first place…

It found the leave entitlements did not apply when the employee was lawfully stood down.

The Court also decided that when employees had been lawfully stood down, they weren’t entitled to access the leave entitlements under the Act. Allowing an employee to access the leave entitlements would

… go against the very object and purpose of conferring those entitlements…

The Court rejected the part of the Act dealing with authorised absences because it didn’t apply to circumstances in which a stood down employee was seeking to access leave entitlements. This was the very issue before the Court.

The Court dismissed the unions’ applications. 

Our observations about stand down laws

Although this decision is in favour of employers and allows employers some financial relief during the COVID-19 era, the unions may still appeal. The Court didn’t consider whether stood down employees could access annual leave under other sections of the Act (sections 87 to 90). For the time being, this creates legal uncertainty for both employers and employees.

If you are considering standing down part of your workforce due to COVID-19, contact us for advice.

DISCLAIMER: We accept no responsibility for any action taken after reading this article. It is intended as a guide only and is not a substitute for the expert legal advice you can get from marshalls+dent+wilmoth and other relevant experts.