Stand Down vs Redundancy — What's the Difference?
Stand down means temporary unpaid leave while still employed. Redundancy means your job is permanently gone. Learn the key differences, your rights during stand down, and when stand down becomes redundancy.
What is a stand down?
A stand down occurs when an employer directs employees to not attend work, without pay, because there is a stoppage of work that the employer cannot reasonably be held responsible for. Under section 524 of the Fair Work Act 2009, an employer can stand down employees during a period when they cannot usefully be employed because of industrial action (not by the employee or their union), a breakdown of machinery or equipment (if the employer is not responsible), or a stoppage of work for any cause for which the employer cannot reasonably be held responsible. The critical feature of a stand down is that the employment relationship continues. You are still employed, your position still exists, and you are expected to return to work when the stoppage ends. During COVID-19, stand downs became extremely common as businesses were forced to close due to government-mandated lockdowns — a cause the employer could not be held responsible for. Natural disasters such as floods, bushfires, and cyclones are other common triggers for lawful stand downs.
What is redundancy?
Redundancy occurs when an employer no longer requires the employee's job to be done by anyone, or when the employer becomes insolvent or bankrupt. Unlike a stand down, redundancy is a permanent termination of the employment relationship. Your job ceases to exist. When made redundant, you are entitled to redundancy pay (based on years of service under the NES scale), payment in lieu of notice (or working out the notice period), payout of accrued annual leave and long service leave, and any other entitlements owed under your award or agreement. The NES redundancy scale ranges from 4 weeks' pay for 1-2 years of service up to 16 weeks' pay for 9-10 years. The redundancy must be 'genuine' — meaning the job is truly no longer needed, the employer has complied with consultation obligations, and there was no reasonable redeployment opportunity within the business or associated entities. If the redundancy is not genuine, it may constitute unfair dismissal.
Your entitlements during a stand down
During a stand down, you do not receive your regular wages for the period you are stood down. However, several important entitlements continue. Your employment is continuous — the stand down period counts as service for the purposes of calculating long service leave, redundancy pay, and other service-based entitlements. Leave continues to accrue — you still accumulate annual leave and personal/carer's leave during the stand down period, because leave accrues based on your ordinary hours of work, not hours actually worked. You can use accrued leave — if you have accrued annual leave or long service leave, you can request (or your employer can direct you, in some circumstances) to take paid leave during the stand down period. Public holidays falling during the stand down must still be paid if you would ordinarily have worked on that day. Your employer must also continue to meet superannuation obligations on any amounts actually paid to you (such as leave payments). You remain entitled to workers' compensation coverage.
When can an employer legally stand you down?
The stand down must be caused by a stoppage of work for which the employer is not responsible. This is a strict test. An employer cannot stand you down simply because business is slow, there are not enough customers, or revenue has dropped. A downturn in trade, on its own, is not a lawful ground for stand down — this was confirmed in multiple Fair Work Commission decisions. Lawful stand down scenarios include: government-ordered shutdowns (such as COVID-19 lockdowns), natural disasters destroying the workplace, equipment breakdowns where the employer could not have reasonably prevented the failure, and industrial action by other workers affecting your ability to work. If your employer stands you down unlawfully — for example, because business is quiet — you may be entitled to recover your lost wages through the Fair Work Commission or Federal Court. You should seek advice promptly if you believe a stand down is not genuine. The onus is on the employer to demonstrate that the stand down meets the requirements of section 524.
When does a stand down become a redundancy?
A stand down is meant to be temporary. But if the stoppage continues indefinitely and it becomes clear the employer no longer needs the employee's role, the situation may effectively become a redundancy. There is no fixed time limit after which a stand down automatically converts to a redundancy — it depends on the circumstances. However, if the reason for the stand down becomes permanent (for example, a business permanently closes a location that was damaged by flood), then continuing to stand employees down rather than making them redundant could be challenged. Employees who have been stood down for an extended period can apply to the Fair Work Commission under section 526 for an order that the employer's stand down action is not authorised. If the Commission agrees, the employer may need to pay the employee or formally make the role redundant (triggering redundancy pay and notice obligations). If you have been stood down for weeks or months with no clear return date, it is worth seeking advice about whether you are effectively being denied your redundancy entitlements.
Stand down during natural disasters and emergencies
Natural disasters are one of the most common triggers for lawful stand downs. If a cyclone, bushfire, or flood makes it impossible to operate the workplace, the employer can stand employees down because the stoppage is caused by something beyond the employer's control. During the 2019-20 bushfire season and the 2022 East Coast floods, many employees were stood down. The Fair Work Act provides some additional protections in disaster situations: employees can access their paid personal/carer's leave, community service leave is available for voluntary emergency management activities, and the government may activate disaster payments through Services Australia. Some Modern Awards also include specific natural disaster clauses that provide additional protections beyond the NES. If a natural disaster permanently destroys a business or makes a role permanently unnecessary, the stand down should transition to a genuine redundancy with appropriate entitlements. Employers should not use rolling stand downs as a way to avoid paying redundancy entitlements in these situations.
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General information and estimates only — not legal, financial, or tax advice. Always verify with the Fair Work Ombudsman (13 13 94) or a qualified professional.
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