A number of our clients are asking about when they can lawfully send employees home from work. You can do this as a result of[1]:

  1. stand down;
  2. suspension;
  3. ‘no work as directed, no pay’; and
  4.  agreement.

Stand down is an employer’s right under the Fair Work Act to suspend the usual rights and obligations that apply under a contract of employment for a period.  This includes the obligation to make payments.

Suspension of an employee must usually occur with pay.  This often occurs during misconduct investigations.

The phrase ‘no work as directed, no pay’ applies when an employee wants to be selective about performing some aspects of their role and not others.  If the employer agrees, they must be paid.  If the employer rejects the proposal, there is no entitlement to pay.

You may stand down an employee under the Fair Work Act[2] during a period that the following criteria are met[3]:

  1. the employee cannot be usefully employed; and
  2. this is because of a stoppage of work for any cause for which you as an employer cannot reasonably be held responsible.

COVID-19 may well qualify however, it needs to directly cause the stoppage of work to justify standing down employees.

For example, the government’s announcement of pubs and cafes closing.  However, a reduction in a business’ sales caused by the government’s directions about social distancing is less clear.

If COVID-19 stops the employee from performing their usual duties (and they can’t otherwise be usefully employed) then they can lawfully be stood down.  If they are able to safely work, but work has dried up, this is more likely to be a redundancy situation.  If the situation does not meet the criteria for stand down, the employee is entitled to be paid.


The least worst outcome in terrible circumstances such as these usually arises from consultation and agreement with staff.  You can agree with your staff that they will take paid or unpaid leave.  If this occurs, the employee will not be ‘stood down’ during those agreed periods of leave.  Employees may see this as a better alternative than redundancy.

[1] Amongst other things.

[2] This situation applies if terms of an Enterprise Agreement or contract do not govern the parties’ stand down rights and obligations with respect to a particular circumstance.

[3] This is not an exhaustive list.