Can I stand an employee down without pay?
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The fundamental principle within New Zealand employment law is that; if the employee is ready, willing and able to work, the employer must pay their ordinary wages. However, situations do arise from time to time where the employee is able to work, but for some valid reason, the employer does not want the employee to attend work.
In such case, the terms and conditions of employment agreed between the parties will dictate whether any required absence from work is to be paid, or whether the employer has a legal right to stand the employee down without pay.
Standing an employee down may only occur in justified circumstances. The inability of the company to provide work to the employee is not justified, nor is the fact that the employee may be facing some form of disciplinary action.
If the employee refuses to work, or is unable to work due to their own actions, their absence would likely be unpaid (if other leave entitlements did not apply) – however this would not in itself be deemed a standdown.
Frequently Asked Questions.
What is the difference between a ‘stand-down’ and a suspension?
A period of suspension is most likely to be imposed where an employee is subject to a formal disciplinary process, or if the employee the subject of a complaint leading to a formal investigation process. However, imposing a period of suspension can only occur if ‘suspension’ is recorded as a term and condition in the employee’s employment agreement.
Suspension cannot be imposed unilaterally, with it only being confirmed as a result of genuine consultation with the employee before any decision is confirmed. A period of suspension will also be paid, unless the employment agreement allows for unpaid suspension.
Standdown usually only occurs as a temporary measure prior to a potential period of paid suspension being imposed with a stand down being used to ‘take the heat out of a situation or more commonly for health and safety reasons (i.e. failure of a drug or alcohol test or physical violence). A standdown under one of these scenarios will generally be paid.
When can a standdown or suspension be unpaid?
Subject to the provisions of the employment agreement, a period of suspension may become unpaid where a formal process becomes prolonged due to the unavailability of the employee (who is already suspended or who due to situations outside of work prevents them from being able to attend work)
Does the employee have to agree to being stood down?
Mutual agreement is always preferred, however particularly where the justification for the stand down is for health and safety reasons, the employer may be in a position where they can make the decision despite the employee’s views.
For this to occur, the potential of stand down must be a term and condition of employment and therefore the ability to exercise this right is already contractual.
Where the employee cannot or will not work due to their own actions (e.g. refusal to work, strike activity), non-payment may be lawful without consent.
A period of paid stand down should always be for as short as possible and where there is a need to remove for the employee from the workplace for a longer period of time, the initial standdown could then be superseded by a formal paid period of suspension – subject to consultation.
Are there risks in standing an employee down?
Where contractual provisions do not support a stand down ability or the process in standing down or suspending an employee have not complied with all procedural fairness obligations, the employee will have the right to raise a personal grievance for unjustified disadvantage.
Therefore, ensuring correct processes and decisions with respect to periods of stand down and suspension are critical. If you need any assistance in seeking to implement either a stand down or a suspension, please feel free to contact one of the Employment Relations Consultants at Russell Drake Consulting.