COVID-19 not a complete defence, says Fair Work Commission, in stand down case

By Christy Miller and Rosie Kirby
18 Mar 2021
We should expect to see more challenges to the way stand down provisions have been used and the use of reasonable and lawful directions in the context of COVID-19.


As the COVID-19 pandemic progresses, businesses need to ensure they are carefully utilising all potentially available employment levers (including stand down, reasonable and lawful directions and redundancies). While these decisions on how, where and whether employees work may be heavily influenced by relevant government health recommendations, employees may still challenge these decisions and employers may not be able to blame COIVD-19, opening business up to liability and presenting another level of risk for employers during this unpredictable time. 

Into this evolving situation the Fair Work Commission has provided some muddled guidance in relation to the use of stand down orders in the aged care industry, an industry heavily impacted by COVID-19.

In its decision of Health Services Union v Presbyterian Aged Care [2021] FWC 45, the Commission ordered that Presbyterian Aged Care (PAC) reinstate the leave balances of 9 employees who were stood down and directed to take leave after being potentially exposed to COVID-19.

In late 2020 PAC was informed by Concord Hospital that one of its residents had been treated by a doctor who had been exposed to the COVID-19 virus. The hospital informed PAC that any staff who had contact with the resident would need to be off work for 14 days after their last contact, but they were not required to isolate at home.

PAC took steps to identify all contacts and stand down the 9 employees. At the conclusion of the four days (and the resident returning three negative results), PAC informed the nine staff that they could return to work and provided them with forms so they could nominate which type of leave they wished to use for the preceding four days.

However, the Commission determined that this direction was unfair and it was "just the right thing to do" to require PAC to re-credit the leave entitlements of the relevant employees. 

Was this a stand down and how do the stand down provisions operate?

The Commission determined that the 9 employees were not "stood down" pursuant to the Fair Work Act 2009 (Cth).

Under section 524(c) of the Fair Work Act 2009 (Cth), an employer may stand down an employee during a period in which the employee cannot usefully be employed because of a stoppage of work for any cause for which the employer cannot reasonably be held responsible.

The Commission determined that, in this case, there was no stoppage of work as "the work that the relevant employees performed continued to be performed during the relevant time – by other employees."

COVID-19 will never be a complete defence to employment actions that adversely impact an employee.

This case demonstrates a difficult juncture between:

  • on the one hand, what is reasonable and required by business to manage the ongoing impact of COVID-19 and protect the workplace health and safety of all staff and residents; and
  • on the other hand, the operation of the Fair Work Act.

The upshot of the decision is that it places the cost of managing this balance, and the impact of COVID-19, solely on businesses.

The Commission said the "stand down" was not reasonable but conceded that the business had "no other choice". In doing so, this decision calls into question the directions that many employers may have given employees over the last year to work from home or stay at home under a potential COVID-19 cloud.

In making its decision, the Commission took into consideration recent changes to the Aged Care Award and PAC's Coronavirus Leave Policy, the latter of which effectively entitled the employees to full pay for all relevant shifts. It follows that businesses can seek to manage their liability and the ongoing impact of COVID-19 by ensuring policy compliance and keeping abreast of new legal developments. To the extent that policies need to be updated to reflect changes in the law and the business' needs, employers should make sure they are being updated regularly and employees are being consulted about the need and impact of these changes. We also recommend that businesses seek legal advice when invoking the stand down powers of the Fair Work Act.

While stand downs have become increasingly common over the last year in light of the COVID-19 pandemic, there are risks associated with their use or issuing any direction to employees that may adversely impact entitlements. We should expect to see more challenges to the way stand down provisions have been used and the use of "reasonable and lawful directions". It is also likely that the Commission's approach in this area will guide future decisions in relation to other employer directions aimed at protecting the health and safety of the public and employees including staff vaccinations.

When making decisions to stand down employees or issuing directions to employees about attendance at work or other matters because of COVID-19, an employer's guiding light should always be:

  • what does the Fair Work Act say?
  • what do my policies / enterprise agreement / modern awards / contract say?
  • is the direction reasonable in the circumstances?

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.