Cyclone Veronica recently swept through the Pilbara region, bringing destructive weather conditions that meant many local businesses were faced with the prospect of temporarily ceasing business operations, leaving employees without work in the meantime. In such an event, employers must know what legislation to refer to and what their obligations are regarding payment to employees.
Stand down provisions
The term ‘stand down’ has a very specific meaning as outlined in Section 524 of the Fair Work Act 2009 (Cth) (the Act). This section of the Act outlines circumstances in which an employer may stand down employees. These include when an employee cannot usefully be employed due to one of the following reasons;
- Industrial action (that is not organised or engaged in by the employer);
- A breakdown of machinery or equipment, provided that the employer cannot reasonably be held responsible for the breakdown;
- A stoppage of work for any cause for which the employer cannot reasonably be held responsible.
In the absence of an enterprise agreement or contract of employment that contains stand down provisions, an employer may stand employees down in the above circumstances without pay. Where there is a binding enterprise agreement or contract of employment providing for the employer to stand down the employee during a period where they cannot usefully be employed, then employees may only be stood down in accordance with the agreement or contract terms. Additionally, where the breakdown or stoppage in work could reasonably have been prevented by the employer, employees may need to be paid for the stand down period.
Employers should be mindful that in order to argue that they ‘cannot reasonably be held responsible’ for the breakdown, they must have taken reasonable steps to ensure that any machinery or equipment is in good working condition. Employers are expected to carry out routine maintenance on machinery and equipment. There may also be an expectation that there is readily available back-up equipment, such as a back-up power generator. If an employer had a main and a backup generator that were both regularly maintained, and both failed due to a manufacturing fault, this may result in a situation where the employer cannot reasonably be held responsible for the breakdown.
In any stoppage of work the employer should be able to show that they have made attempts to mitigate the cause/effects of the stoppage. To build on the example of standing down employees when machinery or equipment fails, employers should explore alternatives while the cause of the failure is assessed. This could include training, paperwork, team meetings or the like. When a major event occurs, it may be that the business already has a policy for stand down in place that outlines the procedures that will be followed. If such a policy or procedure exists and is more beneficial than what is outlined in the Act, the provisions contained within the policy will prevail.
Options for payment
In circumstances where employers have the option to stand down employees without pay, they should consider the financial impact on employees. The best practice approach in these situations is to offer the affected employees the option of accessing accrued annual leave or long service leave, if available. Employers may also choose to offer annual leave in advance, although there is the risk that if an employee’s employment ends before making up any deficit in accruals, employers may find themselves unable to recoup these funds.
Emergency Management Plans
An Emergency Management Plan (EMP) is a useful tool to assist employers in meeting their statutory obligations, particularly if the business is in a high-risk area for natural disasters like the Pilbara. The degree to which a hazard or disaster is likely to occur relates to requirements under the Occupational Health and Safety Regulations 1996 (WA). These regulations require the employer to identify hazards to which their employees are likely to be exposed, assess that risk and consider how those risks may be reduced.
Employers should consider these plans from a holistic perspective. EMP’s could reference multiple hazards that a business is prone to and then outline appropriate responses for each incident. Each organisation will have a slightly different EMP; a business in a high-risk area is going to have different hazard considerations to a business in Perth. The details of the plan should be clearly communicated to employees, along with regular reminders and notification of any variations.
Businesses could have protocols that are tailored to certain situations. There could be various alerts and responses that are appropriate depending on the type and level of threat posed by the natural disaster. An organisation where employees work outdoors may require a more robust contingency plan for a cyclone compared to an organisation where all staff are working in an office.
Some common considerations are as follows;
- Employees could be sent home before a major event occurs, provided there is enough time and it is safe to do so.
- Conditions allowing, if employees are unable to get home safely via their own means then the business may choose to provide transport, such as through company vehicles, coach transfers, paid taxi’s etc.
- There should be protocols for where employees are confined to work premises with trained managers on hand to coordinate the situation. Employees should be provided with very clear instructions regarding where they are expected to be. It could also be outlined that non-compliance with these instructions may result in disciplinary action, up to and including termination of their employment. Consequences of non-compliance should be determined on a case-by-case basis.
- Throughout these situations, each employee should be accounted for by their direct manager or supervisor.
- Return to work policies should also be put in place. Employees should be advised how they will be notified about their expected return to work.
- Employers should contemplate whether some employees will be able to return to work; perhaps they live in an area that is still affected by the disaster or perhaps infrastructure has been damaged etc. In such circumstances, businesses may agree with their employees regarding the taking of leave entitlements, such as annual leave.
For more information, contact CCIWA’s Employee Relations Advice Centre on (08) 9365 7660 or email email@example.com.