What You Need to Know: Fuel Disruption and Standing Employees Down

With continued concern around fuel availability, supply delays and operating pressure, some employers may be asking whether they can stand employees down without pay. The answer is only in limited circumstances. A stand down is not available just because business is slower, fuel is more expensive, or operations have become difficult. Section 524 of the Fair Work Act 2009 only applies where employees cannot be usefully employed because of specific events set out in the legislation, including a stoppage of work for a cause the employer cannot reasonably be held responsible for.

The legal test is stricter than many employers think

The Fair Work Commission has made it clear that the requirement for a “stoppage of work” is interpreted strictly. In Charles v Airlie Beach Plumbing & Gasfitting Pty Ltd [2020] FWC 6005, the Commission relied on earlier authority and confirmed that a genuine stoppage is required, not simply a downturn or disruption. The decision refers to Bristow Helicopters, where it was said that section 524(1)(c) requires some event in which work is “consciously halted” for some reason and usually for an identified period, and that a reduction in available work is not enough.

What this means in practice

Put bluntly, less work is not the same as a stoppage of work. If the business can still operate, even at a reduced level, or employees can still perform useful duties, the stand down provisions are unlikely to apply. Fair Work’s own guidance says employers generally cannot stand employees down just because the business is quiet or there is not enough work.

For a stand down to be arguable, the relevant work or business activity must come to a real halt because of something outside the employer’s control. That may occur, for example, if fuel rationing, enforceable government restrictions, or emergency measures prevent the business from operating in any meaningful way. Fair Work gives examples such as lack of supply, natural disaster, or closure because of an enforceable government direction.

Fuel pressure alone will usually not be enough

If the issue is rising fuel costs, delays in supply, tighter margins, or general operational inconvenience, that will usually fall short of the legal test. Those situations are more likely to be viewed as part of the normal commercial realities of running a business, rather than a stoppage of work enlivening section 524. The critical question is not whether the business is under pressure, but whether the employees cannot be usefully employed because work has genuinely stopped.

If a lawful stand down does apply

Where section 524 is properly triggered, employees may be stood down without pay for the relevant period. However, they remain employed, their service continues, and they continue to accrue leave based on their normal hours. Employees may also be able to access accrued annual leave or long service leave by agreement or where otherwise lawful.

What employers should consider first

Before moving to stand down, businesses should first assess whether there are safer and more appropriate options available, including temporary changes to duties, reduced hours by agreement, altered rosters, leave arrangements, or - if the downturn is ongoing - proper business processes around restructure or redundancy. Fair Work expressly recommends employers consider other available options before deciding to stand employees down.

Bottom line

A stand down under section 524 is a narrow power. It is not triggered by inconvenience, higher costs, or a mere reduction in available work. The better view is that there must be a genuine stoppage of the relevant work activity, caused by something outside the employer’s control, before stand down can lawfully be considered. If fuel disruptions do not reach that point, businesses should instead look at ordinary workforce management options such as temporary changes, reduced hours by agreement, or redundancy processes where appropriate.

Need help?

If your business is experiencing disruption due to fuel supply issues and you are considering standing employees down, contact the ER Team before taking action. This is an area where moving too early, or on the wrong assumptions, can create real wage and compliance risk.