What Is Employee Stand Down?

COVID-19 has had an unprecedented effect on businesses.

To cope with the impact, many employers have been faced with the difficult choice of standing down their employees.

But what does “stand down” mean? When can you stand down your employees? And what are the implications you should be thinking about?

New Zealand’s Employment Relations Authority provides guidance on how you can decide whether your circumstances allow you to stand down an employee.

In this article, we’ll walk you through these guidelines and set out when you can stand down your employees due to the impact of COVID-19.

What Does It Mean To Stand Down Employees?

Employee stand-down in New Zealand is different from redundancy or dismissal.

You can stand down an employee if there is no work available for them due to reasons beyond your control.

If you decide to stand down an employee, this means that the employee will be temporarily out of work.

However, they’ll still be employed by you. Standing them down means that they won’t be able to work and will not receive wages from you until work becomes available again.

It’s important to note that in New Zealand, the term ‘stand down’ is not widely used in employment law, and employers must adhere to the provisions of the Employment Relations Act 2000 when there is no work available for employees.

When Can I Stand Down Employees?

A situation where employees cannot work due to circumstances beyond the employer’s control may arise in New Zealand.

There are several scenarios in which an employee might not be able to work:

• Equipment breakdown for which the employer is not responsible
• Industrial action not organised by the employer
• Stoppage of work for which the employer can’t be held responsible, such as a natural disaster or, in some cases, a pandemic

The impact of the COVID-19 pandemic may be considered a situation where work cannot be provided. As an employer, you generally can’t be held responsible for this.

However, the specific circumstances can be complex, so it’s best to seek legal advice if you’re unsure.

What Rights Do My Employees Have?

If you decide to cease providing work to your employees, they still remain employees of your company.

This means that their usual employment entitlements under their contract continue to apply, except for the right to work or be paid.

During this period, your employees can use their leave entitlements to support themselves.

During a period where employees cannot work, they may continue to accrue leave entitlements, depending on the type of leave and the terms of their employment agreement.

I Don’t Want To Cease Providing Work To My Employees. What Are My Options?

The process of ceasing to provide work to employees can be difficult, so it’s best to consider other options that may be available to you and your employees.

Some of these options include:

• Mutually agreeing to reduced hours until the amount of work available for your employees picks up again
• Mutually agreeing to use accrued leave entitlements, meaning your employees could use their annual leave entitlements instead of ceasing work without pay
• Redundancies. This may be an option if you believe there will no longer be work available for your employees in the foreseeable future.

If you decide to pursue any of the above options, it’s important to ensure that these agreements are confirmed in writing.

What To Take Away…

Ceasing to provide work to staff or making them redundant is not an easy decision to make. It’s important to ensure you have all the relevant information before you proceed with any action regarding your employees.

If you have any questions about ceasing to provide work to employees or are unsure of what options are available to you, our experienced team can be contacted on 0800 002 184 or [email protected]. We’re here to help!

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