In the wake of the recent coronavirus shutdown provisions and the wider economic downturn, small businesses are likely feeling the crunch. Currently, our advisors are being asked if businesses should start asking employees to stand down.

To ask your employees to “stand down” is to suspend their work requirements and pay whilst retaining their job for when the situation improves. This usually occurs after every other avenue – such as requesting they use their annual leave or long-service leave – has been exhausted.

Asking your employees to stand down can usually only occur when your business is experiencing extreme hardship from circumstances outside the owner’s control.

This may be a sensible option for businesses forced to close during recent shutdown requirements or have an extreme decline in business due to COVID-19 and desperately need to improve cashflow.

Before asking employees to stand down, businesses need to check which laws and regulations they must adhere to.

Many businesses will fall under the Western Australian Industrial Relations Act 1979, however those considered a ‘national system employer’ must instead adhere to the Fair Work Act 2009. We have added some useful links at the bottom to find out which laws you must adhere by.

If you’re worried about your valued employees experiencing financial difficulty after asking them to stand down, the government has recently announced additional support measures for employees.

Permanent employees who have been asked to stand down, or casuals and contractors that have had their income reduced may now be eligible for a Jobseeker or Youth Allowance payment. These payments come into effect on 27 April.

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