Skip to main content

A Stand-Down Notice is a formal written notice issued by an Australian employer to one or more employees informing them that they are being stood down from their duties without pay under s 524 of the Fair Work Act 2009 (Cth). The stand-down power is a specific statutory mechanism that allows an employer to temporarily direct an employee not to perform work — without the obligation to pay the employee — during a period in which the employee cannot be usefully employed because of circumstances outside the employer control. What is a Stand-Down Under the Fair Work Act 2009 (Cth)? A stand-down under s 524 of the Fair Work Act 2009 (Cth) is a formal direction by an employer that an employee is temporarily relieved of their work obligations without pay, because no useful work is available for the employee due to: (a) industrial action (other than action by the employer or directed against the employer); (b) a breakdown of machinery or equipment for which the employer cannot reasonably be held responsible; or (c) a stoppage of work due to any cause for which the employer cannot reasonably be held responsible. The employee remains employed throughout the stand-down period — the stand-down is not a termination of employment and does not constitute redundancy. The stand-down provisions in the Fair Work Act 2009 (Cth) were prominently used during the COVID-19 pandemic, where the government enacted the JobKeeper enabling stand-down directions under the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 (Cth). While those specific provisions have now expired, the general stand-down power in s 524 remains in force and is available to employers facing genuine operational stoppages. When Can an Employer Stand Down an Employee? An employer may stand down an employee under s 524(1) of the Fair Work Act 2009 (Cth) only when all three of the following conditions are satisfied: 1. The employee cannot be usefully employed: There must be no work that the employee can meaningfully perform during the stand-down period. The employer must consider whether the employee can be redeployed to other duties before issuing a stand-down notice. 2. The stoppage is due to a qualifying cause: The stoppage must arise from industrial action (not by the employer), a breakdown of machinery or equipment (for which the employer is not reasonably responsible), or a stoppage of work due to any cause for which the employer cannot reasonably be held responsible. Natural disasters, government-directed closures, supply chain failures caused by external parties, and pandemic-related restrictions have all been considered by the Fair Work Commission in the context of s 524. 3. The employer cannot reasonably be held responsible: The cause of the stoppage must be outside the employer reasonable control. A stand-down cannot be used simply because an employer is experiencing financial difficulty, has insufficient orders, or has chosen to close a worksite. If these conditions are not satisfied, the purported stand-down is unlawful, and the employer will be liable to pay the employee for the period of the stand-down. An employer who is uncertain whether the stand-down power applies to its circumstances should seek legal advice before issuing a stand-down notice. Pay and Entitlements During a Stand-Down During a lawful stand-down under s 524, the employee is generally not entitled to payment for the period of the stand-down, unless a Modern Award, enterprise agreement, or employment contract provides otherwise. However, annual leave and personal leave continue to accrue during a stand-down because the employee remains employed. Under s 524(1A) of the Fair Work Act 2009 (Cth), an employee may request to take paid annual leave during the stand-down period, and the employer must not unreasonably refuse such a request. Superannuation guarantee contributions under the Superannuation Guarantee (Administration) Act 1992 (Cth) are generally not payable in respect of the stand-down period if no ordinary time earnings are paid, but the position should be confirmed for each Modern Award or enterprise agreement that applies. Employee and Employer Rights During a Stand-Down Under s 526 of the Fair Work Act 2009 (Cth), an employee (or a union acting on behalf of an employee) may apply to the Fair Work Commission to deal with a dispute about whether a stand-down is lawful, or about whether an employee may take paid leave during the stand-down. The Commission has broad powers to make orders in relation to the stand-down, including ordering the employer to pay the employee if the stand-down is found not to comply with s 524. This template is suitable for use by employers across all Australian states and territories — New South Wales, Victoria, Queensland, Western Australia, South Australia, Tasmania, the Australian Capital Territory, and the Northern Territory — whose employees are covered by the national workplace relations system under the Fair Work Act 2009 (Cth).

What Is a Stand-Down Notice (Australia)?

A Stand-Down Notice is a formal written notice issued by an Australian employer to one or more employees, formally directing them not to perform work during a period in which no useful work is available for them, as a result of circumstances outside the employer control. The stand-down power is contained in s 524 of the Fair Work Act 2009 (Cth) and allows an employer to temporarily cease paying an employee without that cessation constituting a termination of employment, a redundancy, or a breach of the employment contract.

The stand-down mechanism is distinct from retrenchment, redundancy, or dismissal. The employee retains their employment status throughout the stand-down period — their employment is not terminated, their accrued leave entitlements continue to accrue, and they remain bound by their continuing obligations to the employer such as confidentiality and non-competition. The employer retains the right to direct the employee to return to work when the stand-down period ends.

The grounds for a valid stand-down under s 524(1) are exhaustive, not illustrative. An employer may only exercise the stand-down power if one of three specific triggers is satisfied: industrial action (not caused by or targeted at the employer), breakdown of machinery or equipment (for which the employer cannot reasonably be held responsible), or a stoppage of work due to any cause for which the employer cannot reasonably be held responsible. This last category has been interpreted to include natural disasters, government-directed closures, pandemic-related restrictions, and external supply chain failures, but does not extend to ordinary commercial risk or employer financial difficulty.

A written stand-down notice is not expressly required by the Fair Work Act 2009 (Cth), but is strongly recommended as best practice to create a clear record of the basis for the stand-down, the period of the stand-down, and the employee entitlements and obligations during the stand-down period. A written notice also helps the employer demonstrate compliance with s 524 if the stand-down is later challenged before the Fair Work Commission under s 526.

When Do You Need a Stand-Down Notice (Australia)?

An employer needs to issue a Stand-Down Notice whenever it proposes to direct employees to cease performing work under s 524 of the Fair Work Act 2009 (Cth) because a qualifying stoppage of work has occurred.

The most common circumstances in which Australian employers have issued stand-down notices include: major equipment or machinery failures that render a worksite inoperable, such as a critical breakdown of production line equipment or systems; industrial action by a third party (for example, a transport workers strike that prevents materials from reaching a manufacturing site); natural disasters that destroy or render inaccessible a workplace, such as floods, cyclones, or bushfires; government-directed closures, such as public health orders requiring the closure of certain business types or locations; and major external supply chain failures, such as a key component supplier ceasing to supply, rendering production impossible.

In each case, the employer must be able to demonstrate that: (1) the cause of the stoppage is one of the qualifying grounds in s 524(1); (2) the employer cannot reasonably be held responsible for the cause; and (3) there is no useful work available for the affected employees, including through redeployment to other areas. An employer who cannot satisfy all three limbs of the test should not issue a stand-down notice and should instead consider other options such as directing employees to take annual leave, implementing unpaid leave by agreement, or commencing a genuine redundancy process if the stoppage is likely to be permanent.

Issuance of a stand-down notice should be preceded by a genuine assessment of whether the conditions are met, and the notice should be issued promptly once the employer has confirmed that the stand-down is lawful.

What to Include in Your Stand-Down Notice (Australia)

An effective Australian Stand-Down Notice must clearly establish the legal basis for the stand-down and communicate the relevant information to the employee in a transparent and respectful manner.

The reason section must specifically reference the qualifying ground under s 524(1) of the Fair Work Act 2009 (Cth) and provide a factual explanation of the specific circumstances that have given rise to the stand-down. Vague references to operational difficulties or business challenges are insufficient — the notice must describe the specific event (for example, the breakdown of a named piece of equipment or a specific government-directed closure) and explain why the employer cannot reasonably be held responsible for it.

The pay and entitlements section must clearly state that the stand-down is without pay (where this is the case under s 524), explain the leave accrual position, address superannuation, and inform the employee of their right to request paid annual leave during the stand-down under s 524(1A). Transparency about entitlements during the stand-down reduces confusion and the risk of disputes.

The obligations section must remind the employee that they remain employed during the stand-down and that their continuing obligations — particularly confidentiality and availability to return to work — remain in effect. Many employers also address secondary employment during stand-down, which is an important practical consideration for employees who may seek to supplement their income during the stand-down period.

The dispute rights section must inform the employee of their right to refer a dispute about the stand-down to the Fair Work Commission under s 526. Including this information demonstrates transparency and good faith, and is important for ensuring the employee is aware of their rights under the Act.

Frequently Asked Questions

Related Documents

You may also find these documents useful:

Employee Warning Letter (Australia)

An Employee Warning Letter is a formal written document issued by an Australian employer to notify an employee of a conduct or performance concern and to warn the employee that further disciplinary action — including dismissal — may follow if the required improvement is not achieved. Under the Fair Work Act 2009 (Cth), a properly issued written warning is a critical step in the progressive discipline process and forms part of the procedural fairness that employers must demonstrate before terminating employment on performance or conduct grounds. What is an Employee Warning Letter? An Employee Warning Letter (also called a formal written warning, a written notice of unsatisfactory performance, or a conduct warning) is a documented disciplinary notice placed on an employee's personnel file. It sets out the specific conduct or performance concern, the employee's response, the improvement required, and the potential consequences of failing to meet those requirements. Unlike informal counselling or a verbal warning, a written warning creates a formal record that can be relied upon in Fair Work Commission proceedings. When is an Employee Warning Letter Needed? An Employee Warning Letter is needed whenever an Australian employer wishes to formally address a matter of unsatisfactory work performance, misconduct, a breach of workplace policy, attendance or punctuality issues, or failure to follow a reasonable and lawful direction. It is particularly important before any consideration of termination on performance grounds, because the Fair Work Act 2009 (Cth) s 387(e) requires that, in assessing whether a dismissal was harsh, unjust or unreasonable, the Fair Work Commission must consider whether the employee was previously warned about their unsatisfactory performance before being dismissed for that reason. Key Elements of an Australian Employee Warning Letter A compliant Australian Employee Warning Letter should include the following elements: 1. Employer and employee identification: Full legal names, job titles, department, and commencement date. 2. Warning level: Whether this is a first, second, or final written warning. Progressive discipline is recognised as best practice under the Fair Work Act 2009 (Cth). 3. Nature and classification of the issue: A clear description of whether the concern relates to performance, misconduct, attendance, policy breach, or another category. 4. Factual description of the incident: An objective, date-specific account of the conduct or performance issue, including any witnesses and any policy or rule breached. 5. Prior disciplinary history: A summary of any prior formal or informal warnings relevant to this matter. 6. Opportunity to respond: Under the Fair Work Act 2009 (Cth) s 387(b), an employee must be given an opportunity to respond to allegations before a decision to warn or dismiss is made. The letter should record when this opportunity was given and summarise the employee's response. 7. Right to a support person: Under s 387(d) of the Fair Work Act 2009 (Cth), an employee is entitled to have a support person present at any meetings related to the disciplinary process. The letter should confirm this right was offered. 8. Required improvement: Specific, measurable corrective actions and a review date by which improvement must be demonstrated. 9. Consequences of non-improvement: A clear statement that further disciplinary action — including termination — may follow if the required standard is not achieved. This satisfies the warning requirement under s 387(e) of the Fair Work Act 2009 (Cth). 10. Employee acknowledgement: A signature line for the employee to acknowledge receipt of the letter. Acknowledgement does not constitute agreement with the warning. Fair Work Act 2009 (Cth) — Procedural Fairness Requirements Australian employers covered by the national workplace relations system must comply with the Fair Work Act 2009 (Cth) when managing employee performance and conduct. Under s 387 of the Act, the Fair Work Commission must consider several criteria when determining whether a dismissal was unfair, including whether the employee was notified of the reason for dismissal (s 387(b)), given an opportunity to respond (s 387(b)), permitted to have a support person (s 387(d)), and warned about unsatisfactory performance (s 387(e)). A written warning letter that complies with these procedural steps reduces the risk of an unfair dismissal claim succeeding before the Commission. This template is designed for use across Australia, including New South Wales, Victoria, Queensland, Western Australia, South Australia, Tasmania, the Australian Capital Territory, and the Northern Territory, for employers in the national workplace relations system.

Redundancy Letter (Australia)

An Australian Redundancy Letter is a formal written document issued by an employer to notify an employee that their position has been genuinely made redundant and that their employment will end as a result. Under the Fair Work Act 2009 (Cth), a genuine redundancy is defined in s 389 and gives employees significant statutory entitlements, including redundancy pay under ss 119–123 and notice of termination under s 117. This template is designed to comply with Australian law and assist employers in managing the redundancy process fairly and transparently. What is a Genuine Redundancy Under Australian Law? Under the Fair Work Act 2009 (Cth) s 389, a redundancy is genuine if three conditions are satisfied: first, the employee's job is no longer required to be performed by anyone because of changes in the operational requirements of the employer's enterprise; second, the employer has complied with any obligation in an applicable Modern Award or enterprise agreement to consult about the redundancy; and third, it would not have been reasonable in all the circumstances for the employee to be redeployed within the employer's enterprise or an associated entity. If all three conditions are met, the employee cannot make a successful unfair dismissal claim based on the redundancy, although general protections claims under Part 3-1 of the Fair Work Act 2009 (Cth) may still be available if the redundancy involved adverse action for a prohibited reason. When is a Redundancy Letter Needed? A Redundancy Letter is needed whenever an Australian employer is eliminating a position due to genuine operational changes — such as business restructures, workforce reductions, automation, changes in customer demand, or the closure of part or all of the business. It is distinct from a Termination Letter (which is used for dismissals for cause or no-fault terminations) and should be used specifically where the redundancy pay entitlements under ss 119–123 of the Fair Work Act 2009 (Cth) apply. Key Elements of an Australian Redundancy Letter A compliant Australian Redundancy Letter should include the following key elements: 1. Employer and employee identification: Full legal names, entity type, job title, and commencement date. 2. Reason for redundancy: A genuine and specific business reason for the redundancy that satisfies the definition in s 389(1)(a) of the Fair Work Act 2009 (Cth). 3. Consultation process: A summary of the consultation undertaken with the employee, including dates of meetings, information provided, and the employee's opportunity to suggest alternatives. Compliance with consultation obligations in applicable Modern Awards or enterprise agreements is required under s 389(1)(b). 4. Selection for redundancy: Where more than one employee could be affected, a description of the selection pool and the objective, non-discriminatory criteria used for selection. 5. Redeployment assessment: Confirmation that the employer has genuinely considered redeployment options within the employer's enterprise or associated entities, as required by s 389(2) of the Fair Work Act 2009 (Cth). 6. Notice period: The applicable notice period under the Fair Work Act 2009 (Cth) s 117 based on the employee's years of continuous service, or the contractual notice period if greater. 7. Statutory redundancy pay: The redundancy pay entitlement calculated under ss 119–123 of the Fair Work Act 2009 (Cth) based on years of continuous service. Note that small business employers (fewer than 15 employees) are exempt from redundancy pay under s 121. 8. Enhanced redundancy pay (if applicable): Details of any enhanced payment above the statutory minimum, including the basis for it. 9. Accrued annual leave: All accrued but unused annual leave must be paid out on termination as a National Employment Standard under the Fair Work Act 2009 (Cth). 10. Superannuation: Superannuation contributions at the applicable Superannuation Guarantee rate under the Superannuation Guarantee (Administration) Act 1992 (Cth) must be paid on all ordinary time earnings in the final pay period. 11. Right of appeal (optional): An offer of an internal appeal process, which while not required by law is considered best practice. Tax Treatment of Redundancy Payments in Australia Genuine redundancy payments receive favourable tax treatment under the Income Tax Assessment Act 1997 (Cth) s 83-170. A tax-free component exists up to a limit calculated as $12,524 plus $6,264 for each complete year of service (2024–25 amounts — indexed annually). Amounts above this limit are taxed as employment termination payments. Employees should be encouraged to seek advice from a registered tax agent or the Australian Taxation Office. This template is suitable for use across all Australian states and territories, including New South Wales, Victoria, Queensland, Western Australia, South Australia, Tasmania, the Australian Capital Territory, and the Northern Territory.

Termination Letter (Australia)

An Australian Termination Letter is a formal written notice issued by an employer to inform an employee that their employment is being terminated. Under the Fair Work Act 2009 (Cth), employers must provide written notice of termination, comply with minimum notice period requirements, pay all outstanding entitlements, and observe procedural fairness to avoid unfair dismissal liability. This document is drafted in accordance with the National Employment Standards (NES) under Part 2-2 of the Fair Work Act 2009 (Cth) and the Superannuation Guarantee (Administration) Act 1992 (Cth). What is an Australian Termination Letter? A Termination Letter (also called a notice of termination of employment, a dismissal letter, or a separation notice) is a written document that formally ends the employment relationship. It is required under the Fair Work Act 2009 (Cth) s 117, which provides that an employer must not terminate an employee's employment unless the employer has given the employee written notice of the day of termination, or has paid the employee in lieu of the notice period. For employees who have completed a minimum employment period (generally six months, or one year for small business employers with fewer than 15 employees under s 383), failure to follow the correct dismissal process can lead to an unfair dismissal application to the Fair Work Commission. When is a Termination Letter Required? An Australian Termination Letter is required in the following situations: when an employer terminates an employee for cause (misconduct or unsatisfactory performance), when an employer terminates employment without cause (no-fault termination), at the end of a probationary period, where a position is being eliminated but the termination does not constitute a genuine redundancy under s 389, and in any other situation where the employment relationship is ended by the employer's initiative. For genuine redundancies, a Redundancy Letter should be used instead. Where serious misconduct justifies summary dismissal (under the Fair Work Regulations 2009 reg 1.07), no notice period is required, but a written record of the dismissal is still strongly recommended. Key Elements of an Australian Termination Letter A compliant Australian Termination Letter should include the following elements: 1. Employer and employee identification: Full legal names, entity type (e.g. Pty Ltd), job titles, department, and commencement date. 2. Type of termination: Whether the termination is for cause (misconduct or performance), serious misconduct (summary dismissal), no-fault, or end of probation. 3. Reason for termination: A clear factual explanation of the reason for termination. The Fair Work Act 2009 (Cth) s 387(a) requires that, to avoid an unfair dismissal finding, the reason for dismissal must be sound, defensible, and well-founded. 4. Notice period: The applicable notice period under the Fair Work Act 2009 (Cth) s 117, calculated on the basis of continuous service. A five-week minimum applies to employees aged 45 or over with at least two years of continuous service. 5. Notice arrangement: Whether the employee will work out the notice period or receive a payment in lieu of notice (PILON). 6. Final pay entitlements: Wages to the termination date, accrued but unused annual leave (which must be paid out on termination under the NES), any applicable long service leave, and payment in lieu of notice. 7. Superannuation: Superannuation contributions at the applicable Superannuation Guarantee rate under the Superannuation Guarantee (Administration) Act 1992 (Cth) must be paid on all ordinary time earnings in the final pay period. 8. Redundancy pay (where applicable): Employees with at least one year of continuous service who are made genuinely redundant are entitled to redundancy pay under the Fair Work Act 2009 (Cth) s 119. 9. Return of company property: A list of company property the employee must return, with a deadline. 10. Continuing obligations: A reminder that post-employment confidentiality, non-disclosure, and restraint of trade obligations continue to apply. 11. Fair Work rights: Information about the employee's right to lodge an unfair dismissal or general protections application within 21 days of the dismissal taking effect. This template is suitable for use across all Australian states and territories — New South Wales, Victoria, Queensland, Western Australia, South Australia, Tasmania, the Australian Capital Territory, and the Northern Territory — for employers in the national workplace relations system.

Full-Time Employment Agreement (Australia)

Create a legally compliant Full-Time Employment Agreement for Australia. Drafted in accordance with the Fair Work Act 2009 (Cth), the National Employment Standards (NES), and Superannuation Guarantee requirements. Covers position, duties, salary, superannuation at 11.5%, 38-hour week, annual leave (4 weeks), personal/carer's leave (10 days), long service leave, notice periods, probation, confidentiality, and intellectual property assignment.

Deed of Settlement (Employment) (Australia)

Settle unfair dismissal, general protections, and adverse action claims under the Fair Work Act 2009 (Cth). Covers ex gratia payment, preserved NES entitlements, mutual releases, return of property, agreed reference, confidentiality, non-disparagement, Fair Work Commission discontinuance, and deed execution under section 127 Corporations Act 2001.