Stand down pay: when an employer can stop wages, and what you keep
A stand down suspends wages without ending the job. Enter your salary and the number of weeks to see the cost and what continues to accrue.
A stand down is a period during which an employer sends employees home without pay because they cannot usefully be employed, while keeping them employed. Section 524 of the Fair Work Act 2009 allows it in three situations only: industrial action, a breakdown of machinery or equipment, or a stoppage of work for which the employer cannot reasonably be held responsible, such as a natural disaster or an enforceable government direction. No wages are payable for the period unless an enterprise agreement or contract says otherwise. Employment and continuous service are not interrupted: annual leave and personal leave continue to accrue, and the period counts towards redundancy pay, notice and long service leave. An employee on $85,000 stood down for three weeks loses $4,904 before tax. Employees may take paid leave by agreement during a stand down, and public holidays that fall in the period are paid.
What a stand down costs you
Pay lost before tax
$4,904
| Annual leave still accrued | 1.2 days |
| Personal leave still accrued | 0.6 days |
| Service | Continues unbroken |
Updated on · Radif Partners · Editorial policy
The cost of a stand down
| Salary | Weeks stood down | Wages lost before tax | Annual leave accrued | Personal leave accrued |
|---|---|---|---|---|
| $60,000 | 1 | $1,154 | 0.4 days | 0.2 days |
| $85,000 | 3 | $4,904 | 1.2 days | 0.6 days |
| $85,000 | 8 | $13,077 | 3.1 days | 1.5 days |
| $110,000 | 4 | $8,462 | 1.5 days | 0.8 days |
| $140,000 | 12 | $32,308 | 4.6 days | 2.3 days |
Leave accrues during the stand down as if the ordinary hours had been worked: four weeks of annual leave and ten days of personal leave a year for a full-time employee. The wages lost are not recoverable later, unless the stand down turns out to have been unlawful.
The three lawful grounds
Each ground has its limits. Industrial action must be action other than a lockout organised by the employer. A breakdown must be one the employer could not reasonably have prevented, so a failure caused by neglected maintenance does not qualify. A stoppage of work must be a real stoppage, not merely a reduction in demand: the courts have held that a fall in customers, without more, does not stop the work. In every case the employees must be unable to be usefully employed, which obliges the employer to consider other duties, other sites and work from home before standing anyone down.
The power in the Act does not apply if an enterprise agreement or contract of employment deals with stand downs. The agreement’s own clause then governs, including any notice, consultation or payment it requires.
What you keep
You remain an employee. Leave accrues. A public holiday that falls on a day you would ordinarily have worked is paid. You can ask to take annual leave or long service leave, and the employer can agree; you cannot be forced to use leave merely to avoid the stand down, though an award may allow a direction to take excessive leave on its usual terms. You are free to take other work during the stand down unless your contract restricts it, provided you remain available to return.
A day on which you were already on approved paid leave, or otherwise authorised to be absent, is not a stand down day: the leave is paid as arranged.
How long it can last
The Act sets no maximum. The stand down lasts as long as the cause does and must end when employees can again be usefully employed. A stand down that continues after work has resumed, or that is used to avoid redundancy pay, is not lawful. An employee who is stood down for a long period is not thereby dismissed, and cannot claim redundancy pay unless the employer ends the employment or the employee’s position is abolished.
Disputing a stand down
The Fair Work Commission can deal with a dispute about a stand down under section 526, by mediation, conciliation or arbitration, on application by an affected employee, a union or an inspector. It must take fairness between the parties into account. If the Commission or a court finds the stand down was not authorised, the wages for the period are owed as an underpayment. Keep the written notice of stand down and any messages about the reasons, since the dispute usually turns on whether there was useful work.
Stand down, redundancy or reduced hours
These are different things with different costs. A stand down is temporary and unpaid, with the job preserved. A redundancy ends the job and triggers notice, redundancy pay and leave payouts, which the redundancy pay calculator adds up. A reduction of hours or pay requires the employee’s agreement, or a term of the award or agreement that permits it, and a unilateral cut can amount to a dismissal. Where a stand down is followed by redundancy, the weeks stood down count as service for the redundancy scale.
Income support while stood down
A stood-down employee can claim JobSeeker Payment while still employed, since the test is income and availability rather than the existence of a contract. Leave payments taken during the stand down count as income for the period they cover. The Centrelink waiting period guide explains the income maintenance period and the liquid assets test.