Employer obligations and options following the floods
Businesses adversely affected by the current flood crisis have a number of options if there is no work for employees to perform.
All private sector businesses are covered by section 524 of the Fair Work Act which allows for employees to be stood down without pay if there has been a stoppage of work for a reason which the employer cannot be held responsible. Any closure of business directly caused by the flood crisis would qualify for this provision.
Enterprise awards or agreements and individual contracts may contain similar provisions. If an enterprise agreement contains a standdown clause, an employer must follow the provisions of the agreement rather than s.524 (for example, if the enterprise agreement contains a requirement for notice to be given to employees about the standdown).
When employees are stood down relying on s.524 or similar provisions of awards or agreements, they are not required to be paid but retain continuity of employment.
By agreement, employers may arrange for employees to take a period of annual leave while the business remains flood affected, unless an enterprise agreement allows an employer to direct an employee to take leave.
Employees may also be entitled to take paid, or unpaid, carer’s leave to provide support to their immediate family because of an emergency arising from the floods.
For businesses that are not likely to reopen because of the damage caused by the floods, employers may have to terminate employees, in which case the minimum requirements for notice and redundancy pay will arise.
Employers and employees should consult the government hotlines to determine what financial assistance they can access to help them recover from the crisis caused by the floods.
Posted on 17th January 2011
