Termination of employment

There are 4 main reasons for an termination of employment:

  1. Misconduct (breaching the terms of the employment such as not following a reasonable and lawful direction or policy)
  2. Performance  (lack of skill, care, diligence etc)
  3. Capacity (not fulfilling the inherent requirements of their role)
  4. Redundancy (the employee genuinely no longer needs the employee’s role to be done by anyone, or the employer becomes insolvent/bankrupt)

The first thing to look at in any employment-related issue is the Employment Contract itself (as well as any relevant Award or industrial agreement) and depending on the issue, any relevant Workplace Policies or directions/notes on the employee’s file.

If the employee:

  • is a casual;
  • has not been employed for more the prescribed period (6-12 months);
  • was employed for an agreed fixed term or to perform a specific task; or
  • is on probation,

then termination of the employee is usually simple however, where these don’t apply, then the employee may potentially bring or threaten an:

  • unlawful dismissal claim; or
  • unfair dismissal claim.


Given the nature of an ad hoc arrangement, casual employees usually don’t have to give any (or much) notice, and the same goes for the employer.

Generally, there is nothing a casual employee can do if they are terminated unless they have been employed for at least 6 months (or 12 months for a small business – see below), except if it was for an unlawful reason. Then the “general protections” in the Fair Work Act can come into play.

Fixed term agreement

If the employment was for a defined or fixed term and that time has ended, then they will not have been “dismissed”.


Often, the Employment Contract will have a probationary period in which the employee or the employer can terminate without providing any reason on short notice.

Probationary periods are usually 3-6 months, but can be extended.


The Fair Work Act sets out several “general protections” to prevent employees being dismissed for things (each known as an “adverse action“) such as:

  • discriminatory reasons such as race, colour, sex, sexual orientation, age, religious beliefs, mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin etc (unless an inherent requirement of the job)
  • being absent from work because of illness, injury or parental leave
  • performing emergency volunteer work
  • union membership
  • making a complaint or commencing legal action against the employer or exercising a workplace right

Fines can apply for such dismissals in addition to reinstatement and payment of lost wages or salary.

Unlawful dismissal/adverse action claims must be brought within 21 days of the dismissal.



  • an employee has in excess of 6 months of service (or 12 months where the employer is a small business);
  • the employee’s income is below the high income threshold (compensation cap); and
  • the employee’s employment is covered by a modern Award or enterprise agreement, then

unfair dismissal can come into play if the employee’s dismissal was “harsh, unjust or unreasonable” (in the circumstances, considering the reason/s and the process followed) or if the employee felt they had no choice but to resign following such conduct (called “constructive dismissal“).

A termination is not unfair (and it is a complete defence to an unfair dismissal claim) where:

  • a small business follows the Small Business Fair Dismissal Code; or
  • in the case of a genuine redundancy.

Unfair dismissal claims must be brought within 21 days of the dismissal.

Small business exception

Where a business is classified as a “small business” (ie, it has 15 of fewer full time equivalent (including several part time staff but excluding contractors) employees, liability for unfair dismissal is removed where the small business employer has complied with the Small Business Fair Dismissal Code.

The Small Business Fair Dismissal Code Checklist sets out a simple and fair process to follow at termination.


A redundancy is “genuine” where the employer:

  • no longer requires the employee’s job to be performed by anyone because of changes in the operational requirements of the employer’s business;
  • has complied with any obligation in a modern Award or enterprise agreement that requires consultation about the redundancy; an
  • has considered if it would have been reasonable in all the circumstance for the employee to be redeployed within the employer’s business or any associated enterprise.

Additional payment called redundancy pay is payable in addition to notice and unpaid entitlements, such as annual leave etc.


When terminating employment (including for redundancy), the correct period of notice must be given, or payment in lieu if allowed as per the National Employment Standards and the Employment Contract.

An exception to this is “summary dismissal” (on the spot termination, without notice) when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal – usually for serious misconduct (theft, fraud, assault, sexual harassment, serious breaches of workplace health and safety rules and procedures or refusing to carry out a lawful and reasonable instruction that is part of the role.


Where termination is being considered, the employer must have a good reason for the termination and follow procedural fairness in the process.

Where poor performance is the issue, the employee ought to:

  • be informed of the issue, told what is expected and advised of the likely consequence of not improving -eg, termination) and be given a reasonable time to improve; and
  • have a reasonable opportunity to consider and respond to such allegations (and improve).

Where misconduct is involved (other than serious misconduct):

  • the employer ought to be able to point to specific terms of the employment or clear policies as to the conduct required (except where such poor conduct goes without saying); and
  • a proper investigation ought to take place, with the employee having a proper opportunity for the employee to respond to such matters.

Capacity being in issue is often self-evident, such as not being able to do a job – for example a professional licence or vocational qualification lapsing.

Consider how other employees had been dealt in the past with for similar conduct and the position, past conduct and length of service of the employee also.

Keep detailed records of warnings, meetings and counselling (3 warnings are not always required)

The employee should have opportunity to have a support person at interviews and the employer may want a second person (a witness) present.

Maintain a level of professionalism and give notice of termination in writing.


For further information, please contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au 

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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Limitation periods

There are limitation periods that apply to various legal cause of action.

The effect of a limitation period in relation to a legal cause of action is that claims become time-barred, and therefore unable to proceed, where the relevant period of time has elapsed without a claim being brought through the relevant Court or Tribunal.

There is no “Statute of Limitations” in New South Wales as such but there is the Limitations Act 1969 (NSW) which has a default limitation period regime where there is no specific timeframe set out in the relevant Act (such as the Succession Act 2006 (NSW), Home Building Act 1989 (NSW), Defamation Act 2005 (NSW), Fair Trading Act 1987 (NSW), Fair Work Act 2009 (Cth), Criminal Procedure Act 1986 (NSW) etc).

The Limitation Act (or the relevant specific Act) describe the types of legal actions and the limitation periods that apply to them such as the following civil claims:

Cause of action Limitation period
Contractual claims 6 years from the date on which the cause of action accrued
Negligence 6 years from the date on which the cause of action accrued
Family provision 12 months from date of death
Cause of action founded on a deed 12 years from the date on which the cause of action first accrues
Enforcing a judgment 12 years from the date on which the judgment first becomes enforceable
Defamation 1 year from date of publication
Unfair dismissal 21 days from the date of dismissal of employee

NOTE – this is a general guide only – you should get specific advice as to the limitation periods that apply to your specific circumstances

Different limitation periods apply to causes of action in different jurisdictions, such as the Commonwealth or those of each State and Territory. Limitation periods can also apply to some criminal matters but serious crimes generally do not have such limitation periods.

In some very limited circumstances, the relevant limitation period may be able to be extended.


For further information on litigation and dispute resolution, please contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au 

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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Could you be a shadow director?

Shadow directors

The term ‘director’ is defined in s.9 of the Corporations Act 2001 (Cth) (Act) to mean:

(a)          a person who:

(i)            is appointed to the position of a director; or

(ii)           is appointed to the position of an alternate director and is acting in that capacity;

regardless of the name that is given to their position; and

(b)          unless the contrary intention appears, a person who is not validly appointed as a director if:

(i)            they act in the position of a director; or

(ii)           the directors of the company or body are accustomed to act in accordance with the person’s instructions or wishes.

That is, (a) refers to directors notified to ASIC and (b) covers those who are de facto directors or shadow directors.

Consequently, a person who has not been validly appointed as a director of a company (and whose details are not therefore recorded in ASIC’s registers) may nonetheless be deemed a director of that company if they have influence to the extent that the directors of the company are accustomed to acting in accordance with the person’s instructions or wishes or if they act as if they are a director.

Indicators of being a shadow director

Examples of being a de facto or shadow director can include:

  • having independent authority to negotiate and manage executive matters on behalf of the company (like negotiation of important contracts or the managing employment)
  • promotion of the person to the public as having power to bind the company.
  • having unfettered control of the company’s bank accounts
  • being involved in setting up the company

Subparagraph (b)(ii) does not generally apply to advice given by the person in the proper performance of functions attaching to the person’s professional capacity (such as an external accountant, lawyer or professional adviser), but can include employees and spouses of directors (who may own assets as part of a risk minimization/asset protection strategy implemented by their director spouse).

Those that sit on so called “advisory boards” should pay particular attention to the way in which they carry out their roles and the way in which the company follows (or questions or considers) their recommendations or suggestions.


A shadow director will be required to comply with director duties under the Act and can become liable for things like insolvent trading under section 588G.

If you are determined to be a shadow director, penalties can include:

  • a fine of up to $200,000, imprisonment for up to 5 years, or both;
  • personal liability for any loss or damage incurred; and
  • permanent or temporary orders prohibiting you from taking part in the management of a company.

How to help prevent being a shadow director

Steps that can be taken to help minimize the risk of being deemed a director of a company or the consequences of it include:

  • documenting the authorities of key personnel, including limits on authorities, autonomy and decision making (including in employment contracts, workplace policies etc)
  • putting in place robust internal procedures for decision making and approvals
  • ensuring ASIC registers are accurate and up to date
  • limiting advice provided to that which is within your professional qualifications
  • advisors, key staff and ‘advisory boards’ presenting any advice as a recommendation for a company’s consideration, rather than being a direction or instruction to the company or its board
  • otherwise, properly documenting communications
  • consider appropriate insurances


For further information in relation to any business related or company matters, please contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au 

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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New laws for casual employees

The Fair Work Act 2009 (Cth) (Act) has been amended with effect from 27 March 2021 in relation to casual employees.

Here are the 4 practical steps that most employers should take to help ensure compliance with the Act and prevent disputes from arising with their casual employees:

1.            Casual Employment Information Statement

The Fair Work Ombudsman has now made available a new Casual Employment Information Statement (CEIS). Both new and existing casual employees must be given a CEIS.

From 27 March 2021, all employers must give every new casual employee a CEIS before, or as soon as possible after, they commence their employment.

Small business employers (those with less than 15 employees) must give their existing casual employees (those employed before 27 March 2021) a copy of the CEIS as soon as possible after 27 March 2021.   All other employers must give their existing casual employees a copy of the CEIS as soon as possible after 27 September 2021.

Note that the CEIS does not replace the Fair Work Information Statement (FWIS). The FWIS is still required to be provided to every new employee (casual employees should receive both the FWIS and the new CEIS).

2.            Update casual employment contracts

The Act now includes a definition of ‘casual’ employee. Under the new definition, a person is a casual employee if they accept a job offer from an employer knowing that there is no firm advance commitment to ongoing work with an agreed pattern of work.

With retrospective effect, the question of whether an employee is a casual is now assessed based on what was agreed when the employment was offered and accepted, not on the pattern of hours later worked or some other subsequent conduct occurring during the course of their employment.

Employment contracts for casuals, if they don’t already, should:

  • state that the employment is casual;
  • specify that the employer can elect to offer work and that the employee can elect to accept or reject it; and
  • confirm that there is no guarantee of ongoing or regular work and that the employee will only work as required.

3.            Specify the casual loading in employment contracts and payroll documentation

The changes to the Act also remove the ability (which arose from several recent cases such as Workpac v Rossato) for employees to “double-dip” and receive entitlements as permanent staff as well as retaining the casual loading already paid to them (in lieu of such other entitlements).

The amounts actually paid to the employee as casual loading operate as a reduction to, or are set off against, of any amount that may later be determined to be payable by the employer for permanent employee entitlements.

Casual employment contracts thus should:

  • clarify that the employee is paid a casual loading (usually 25%) and that the loading is paid on the basis that the employee is not entitled to relevant permanent employment entitlements such as annual leave, paid personal leave, redundancy pay and the like; and
  • identify the dollar amount of the loading from the base hourly rate where possible.

Further, payroll documentation (including payslips) should separately identify the dollar value of the casual loading paid in each pay period.

4.            Identify eligibility for casual conversions

Once employed as a casual, an employee will continue to be a casual until they either:

a)       become a permanent employee through:

(i)            casual conversion, or

(ii)           are offered (and accept the offer of) full-time or part-time employment, or

b)      stop being employed by the employer.

Although many employers had pre-existing casual conversion obligations in relevant Modern Awards or enterprise agreements, these casual conversion provisions are now included in the National Employment Standards (NES), which means that now employers that were not historically subject to such conversion obligations are subject to the casual conversion pathway regime. Small business employers (with fewer than 15 employees) are not subject to these rules.

The new provisions require employers to offer permanent employment to any casual employee who has:

  • been employed for 12 months; and
  • worked a regular pattern of hours on an ongoing basis for at least the last 6 months of that period; and
  • the employee could continue working those hours as a permanent employee without significant change.

An employer need not make an offer of casual conversion if there are “reasonable grounds” not to, based on facts that are known or reasonably foreseeable (such as where the employee’s position will cease to exist within 12 months, the hours of work that employee is required to perform in the following 12 months will be significantly reduced or the employee’s availability cannot accommodate the significant change in the employees’ hours/days required to be worked).

During the 6-month transition period ending 27 September 2021 and from then on, employers should identify any employees that may meet the criteria for conversion and make an offer of casual conversion to an eligible employee within 21 days of the employee attaining 12 months of employment. There is a form and process relating to the offer (and its acceptance).


Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to any employment related issue or any business/commercial law matter, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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Do you have any Unclaimed Money?

In New South Wales, any unclaimed money is generally held by the Revenue NSW.

Unclaimed money is generally any amount in excess of $100 held for at least 6 years without any activity on an account. This may be because the owner moved, changed their name or simply forgot about it.

Types of unclaimed money held by Revenue NSW include dividends, unpresented cheques, distributions, sale proceeds, commissions, royalties and the like.

Generally, enterprises that operate in NSW and hold unclaimed money as at 30 June in any year must submit the money to Revenue NSW by 31 October of that year, after having made reasonable attempts to contact the rightful owner and return the money to them.

Other thresholds and timeframes apply to specific industries such as real estate agents, law firms and trustee companies that operate trust accounts.

You can search for money held by Revenue NSW here.

Unpaid wages

Sometimes an employer owes wages to an employee who has left their business or where wages have found to be underpaid following a workplace audit.

Where the employee can’t be contacted, the unpaid wages are generally held by the Fair Work Ombudsman and can be searched for here.


Superannuation funds that cannot locate beneficiaries of superannuation monies place the details on the Superannuation Lost Members Register, which can be searched through the MyGov portal via Australian Taxation Office’s website here.

Banks and life insurers

Banks, credit unions and life insurance companies also have unclaimed money issues where a bank account is inactive (has no deposits or withdrawals) for 7 years or where the proceeds of a life insurance policy is unclaimed for 7 years after the policy matures.

Where they can’t locate an owner of funds held, they must lodge their unclaimed monies with the Australian Securities & Investments Commission.

Unclaimed money received by ASIC is transferred to the Commonwealth of Australia Consolidated Revenue Fund and it is available to be claimed at any time by the rightful owner and there is no time limit on claims. ASIC’s unclaimed money search is located at ASIC’s MoneySmart website here.


For further information in relation to unclaimed money or any business related legal issues, please contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au 

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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Unpaid interns

Typically, unpaid internships offer a taste of what is usually involved in a job or industry, as well as the chance to network and to add practical experience to their resume.

Many businesses however seek to avoid paying lawful entitlements to employees by labelling them an “intern” or calling it a “vocational placement” or similar. In law firms (yes, they do it too), it’s a “law clerk”.

The fact is that if they are performing productive work for your business, they are an employee and are therefore legally entitled to be paid.

Before engaging an unpaid intern, business owners need to genuinely consider if the placement is providing them with work experience, a career opportunity and take steps to avoid the arrangement being considered exploitation. That is, are they really an unpaid employee?

To determine whether the arrangement is ‘employment’ ask yourself these questions about the proposed intern:

  1. Will they have actual responsibilities (as opposed to just observing)?
  2. Will their workload be similar to a paid employee?
  3. Will the intern replace a paid employee?
  4. Will the intern have administration duties?
  5. Will the intern collect coffee orders?
  6. Does your business rely on interns for ongoing duties?

If you answered “yes” to any of the above, they are assisting your business, not learning, so it is likely that your unpaid interns will actually be employees and hence entitled to minimum Award rates.

Even if you will genuinely have unpaid interns at your workplace, they should have a contract (although not an employment contract) covering that fact and requiring them to maintain standards such as confidentiality, returning company property at the completion of the placement etc.


For further information in relation to any employment related issue or any business/commercial law matter, contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au 

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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Is your business using the correct form of Fair Work Information Statement?

On 13 August 2020, the High Court of Australia handed down a decision about the method of accruing and taking paid personal/carer’s leave under the National Employment Standards.

The case was Mondolez Australia Pty Ltd v AMWU, which overturned a decision made by the Full Federal Court in August 2019 that could have resulted in significant claims for backpay and contraventions of the Fair Work Act 2009 (Cth) as its effect included that part-time employees are entitled to 10 days’ paid personal leave per year (the same as a full time employee), regardless of the number of days actually worked.

The High Court found that the entitlement to 10 days of personal/carer’s leave is calculated based on an employee’s hours worked, not days when interpreting s.96(1) of the Act such that a ‘day’ refers to a notional day, consisting of 1/10th of an employee’s ordinary hours of work in a 2 week period. Accordingly, 10 days of personal leave can be calculated as 1/26 of an employee’s ordinary hours of work in a year.

The Fair Work Ombudsman has updated the form of Fair Work Information Statement (FWIS) as a result.

Employees need to ensure they provide the correct form of FWIS to all new employees. Is your business using the correct form of Fair Work Information Statement?


For more information, please contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au to discuss your needs.

This information is general only and is not a substitute for proper legal advice.

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Coronavirus: Remote witnessing of legal documents

On 22 April 2020, the Electronic Transactions Amendment (COVID-19 Witnessing of Documents) Regulation 2020 (NSW) came into effect.

The effect of the Regulation is that the signing of legal documents in New South Wales such as Wills, Powers of Attorney, Deeds, Agreements, Appointments of Enduring Guardians, Affidavits and Statutory Declarations can be witnessed by audio visual link, rather than having to be physically present, as is normally the case – that is the law (during the COVID-19 pandemic) now allows the remote witnessing of legal documents.

Some documents have other additional requirements, like Wills which require 2 witnesses, not just one, as is provided for in s.6(1)(c) of the Succession Act 2006 (NSW).

Audio visual link includes Zoom, WhatsApp, Skype, HouseParty, FaceTime and the like.

The witness must sign the document either:

  1. by signing a counterpart of the document as soon as practicable after witnessing the signing of the document; or
  2. if the signatory scans and sends a copy of the signed document electronically, the witness may countersign the document as soon as practicable after witnessing the signing of the document.

The witness must endorse the document, or the copy of the document, with a statement that specifies the method used to witness the signing and that the document was witnessed in accordance with the Electronic Transactions Regulation 2017.

All copies of the document should be stored together so they can be read as the one document.

The Regulations do not change what documents may or may not be executed electronically in NSW – only how documents may be witnessed and attested.  The Regulations also do not affect the laws or requirements of any other jurisdiction, including the Commonwealth (such as company execution of documents under the Corporations Act 2001 (Cth).

Under the COVID-19 Legislation Amendment (Emergency Measures) Act 2020 (NSW), the Regulation were to operate for a maximum period of 6 months from 22 April 2020 however, on 18 September 2020, the Stronger Communities Legislation Amendment (COVID-19) Regulation 2020 came into effect such that, among other things, the operation of the electronic witnessing regulations was extended to 31 December 2021.

Similar regulations are in place in the other States and Territories, such as Queensland’s Justice Legislation (COVID-19 Emergency Response – Wills and Enduring Documents) Regulation 2020 (Qld).


For further information in relation to legal issues arising from Coronavirus, if you had previously held off arranging documents such as for your estate planning due to not wanting to attend our office physically due to social distancing concerns or if you need to discuss how to best to arrange signing of documents under the Regulation, please contact us on (02) 9521 2455 or email help@mckilloplegal.com.au.

This information is general only and is not a substitute for proper legal advice.

Please contact McKillop Legal to discuss your legal concerns or objectives.

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Coronavirus: JobKeeper subsidy

Further to our COVID-19 blogs on employee standdowns and negotiating changes to commercial leases but in this post, the Government on 30 March 2020 announced a $130 billion JobKeeper payment system to help keep more Australians in jobs and support businesses affected by the significant economic impact caused by the Coronavirus. Those workers that are covered by the scheme will receive a fortnightly payment of $1,500 (before tax) through their employer. Employers are to pay their employees and then get reimbursed by the Government later.

The payment is intended to ensure that eligible employers remain connected to their workforce so that businesses are in a position to restart quickly when the pandemic is over.

To get the payments, employers must be eligible and the employees must be eligible.

If your business has been significantly impacted by the Coronavirus (generally able to show a 30% decline in turnover in the relevant month or quarter relative to a year earlier), the business will be able to access a wages subsidy for a maximum of 6 months to assist you to continue paying its employees.

Eligible employees are those who:

  • are currently employed by the eligible employer (including those stood down or re-hired);
  • were employed by the employer at 1 March 2020;
  • are full-time, part-time or a casual employed on a regular basis for longer than 12 months as at 01 March 2020;
  • are at least 16 years of age;
  • are an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder; and
  • are not in receipt of a JobKeeper Payment from another employer.

To register your business’s interest in the JobKeeper system, visit the Australian Taxation Office’s dedicated page.


For further information in relation to legal issues arising from Coronavirus or if you need to discuss how to best deal with employment issues, please contact us on (02) 9521 2455 or email help@mckilloplegal.com.au.

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your legal concerns or objectives.

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Coronavirus: Employees and standdowns

Many businesses are struggling at present with the turndown in sales that are a consequence of the Government’s social distancing rules to help slow down the spread of COVID-19. Those businesses are seeking to minimise costs so as to be able to survive until the Coronavirus heath crisis ends, which appears to be at least 6 months away.

The 2 biggest expenses in business are generally rent and employee/payroll. In another blog post, we discuss how lessors and lessees can negotiate mutually beneficial but generally temporary changes to their commercial leases but in this post, we discuss employee issues.

Options for employers

It is always an option for employers and employees to agree on things such as:

  • working remotely;
  • reduced hours;
  • reduced pay; or
  • taking leave (either accrued or in advance).

Where a business is unable to agree with their staff as to such matters, or if the business needs to significantly and quickly reduce costs or go into hibernation and not just change the way it goes about its business, the first point of reference in relation to the employer/employee relationship is the Employment Contract, followed by any relevant Award. If an Enterprise Bargaining Agreement or EBA applies, then that is the place to look.

Casuals and those on probation are unfortunately the first to be let go as employers seek to minimise costs. This article assumes full time or part time employment.

Often, employment contracts have provisions that allow for the standing down of employees where there is not enough work to keep them engaged.

Assuming there is such a right, then if there is work they can do (even if not their normal role), they can be redeployed but if not, the standdown option generally would be available.

Standdowns are periods where the employment relationship is still in place but there is no payment made by the employer.

So as to keep paying employees at such a time when a standdown is warranted, a business could for example give notice of a requirement to take any accrued annual leave and possibly accrued long service leave. Taking leave in advance is also an option but it does not assist the business as it is still incurring the wage costs and the employees are then in debt to their employer for leave taken but not yet earned.

A benefit to the business of paying out leave entitlements is that this also reduces the businesses’ leave liability in its books (and the benefit to the employee is still getting paid). Note that the payment of leave loading (if leave loading is required by any Award or agreement) is also required when leave is being taken. There is generally no such payment of loading if leave is taken in advance).

Employment contracts or Awards may provided for a period of notice for a standdown but in the absence of that, reasonable notice should suffice.

Where it is not covered in any other document, s.524 of the Fair Work Act 2009 (Cth) can apply. It provides:

(1)  An employer may … stand down an employee during a period in which the employee cannot usefully be employed because of one of the following circumstances:


(c)  a stoppage of work for any cause for which the employer cannot reasonably be held responsible.

Where an employer simply faces a reduction in trade volumes or where it is merely uneconomical to continue to employ staff, it can be a grey area as to whether this is considered a “stoppage” of work for the purposes of the legislation however, where an industry has been shut down as a result of a ministerial direction or public health orders, it will generally be uncontested.

Whilst on stand down:

  • annual leave, personal leave and long service continue to accrue;
  • employees can access personal and carer’s leave (provided they comply with notice and evidence requirements); and
  • employees must be paid for public holidays where it would ordinarily fall on a day they have been stood down.

The main thing to note is that on a standdown, the employees are not being terminated or made redundant – the role is still there, just they can’t be usefully engaged. It may be that termination or redundancy is still an option but it is generally a last resort.

NOTE: Since this blogpost, the Government has announced the JobKeeper subsidy.


For further information in relation to legal issues arising from Coronavirus or if you need to discuss how to best deal with employment issues in light of the current health crisis, please contact us on (02) 9521 2455 or email help@mckilloplegal.com.au.

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your legal concerns or objectives.

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