As the COVID-19 virus continues to spread across the globe, attention in Australian workplaces has turned to standing down employees in circumstances where, due to the impact of COVID-19, there is no useful work which they can perform in their role.

As further restrictions on workplaces, including a State-wide lockdown, become increasingly likely, it is foreseeable that some NSW local governments will need to consider standing down employees.

Unlike private sector employees, whose employment is chiefly regulated by the Fair Work Act 2009 (Cth) (FW Act), industrial relations in the NSW local government sector continues to be regulated by the Industrial Relations Act 1996 (NSW) (IR Act). The process for standing down employees under the Act differs to the process under the FW Act.

How and when can NSW local government employees be stood down?

The IR Act does not permit NSW local governments to stand down employees on their own initiative.

Instead, section 126 of the IR Act requires a NSW local government to apply to the Industrial Relations Commission for an order to stand down employees if there is no useful work for its employees because of:

  • industrial action; or
  • breakdown of machinery; or
  • any other act or omission,

for which it is not responsible.

NSW local government employees stood down by the Industrial Relations Commission are not entitled to remuneration (including allowances) whilst stood down, but employees will continue to accrue leave entitlements during a stand down period.

There is very little judicial commentary on the operation of section 126 of the IR Act, like its equivalent under the FW Act, and neither provision has been considered in the context of an emerging health crisis.

Clearly, COVID-19 is a situation for which no NSW local government is responsible and which may trigger section 126 of the IR Act. It remains important, however, to recognise the difference between:

  • actions and omissions for which a NSW local government is not responsible (e.g. the closure of a council-run swimming pool or library, which may be required by law to be closed); and
  • the cessation of services due to a reduction in demand (which may be a decision at the discretion of a NSW local government and therefore an action for which it is responsible).

Further, even if NSW local government employees are unable to perform their usual duties, a NSW local government employer must consider all options to redeploy affected employees to alternate duties. In the absence of genuine consideration of alternate duties, the Industrial Relations Commission is unlikely to permit a NSW local government to stand down its employees.

What would need to be shown to obtain a stand down order?

In order to obtain an order to stand down employees as a result of COVID-19, NSW local government employers will need to satisfy the Industrial Relations Commission that their employees cannot be usefully employed elsewhere, either at another location or by being redeployed into a different role, as a direct result of the impact of COVID-19 (as opposed to some other interruption to business functions).

Accordingly, if considering a stand down of employees, NSW local government employers should:

  • engage in a process of consultation with affected employees and their representatives (in accordance with the Local Government State Award 2017 or applicable enterprise agreement);
  • consider all available alternatives to a stand-down including alternate duties (having regard to skills, experience, qualifications and training) and access to leave entitlements; and
  • document the process by which any conclusion is reached that employees ought to be stood down because they cannot not be usefully employed elsewhere.

In our view, by communicating the alternative of a stand down to employees if agreement with them and any relevant consultative committee cannot be reached, it is likely that the majority of a workforce would support temporary measures needed to ensure their ongoing employment and remuneration in this time of crisis.

It is also important to note the serious psychological impacts that COVID-19 can have on individuals where there is a risk of a loss of income. While the Commonwealth Government is taking considerable steps to broaden and strengthen the welfare system at present, it is important that all employers, including NSW local governments, continue to provide support to their employees including via EAP services and regular check-ins.

Many thanks to Ethan Aitchison for assisting with putting this article together.

For further information on any of the issues raised in this alert, please contact the Employment Relations and Safety team at McCullough Robertson.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.