Alex is Sprintlaw’s co-founder and principal lawyer. Alex previously worked at a top-tier firm as a lawyer specialising in technology and media contracts, and founded a digital agency which he sold in 2015.
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As a small business owner, there are times when external events disrupt normal operations. Supply chain issues, government directions, or a sudden drop in work can mean you temporarily can’t usefully employ some staff.
When that happens, a stand down may be lawful - and a clear, compliant stand down letter helps you implement it fairly and reduce risk. In this guide, we’ll explain when a stand down letter is appropriate, what to include, and a step-by-step process you can follow in Australia.
We’ll also cover how a stand down differs from suspension or redundancy, what to say about pay and entitlements, and provide a practical template you can tailor to your business.
What Is A Stand Down Letter And When Can You Use One?
A stand down letter is a written notice you give an employee to confirm that you’re lawfully standing them down from work on a temporary basis. You’re not ending employment - you’re pausing work (and usually pay) because there’s no useful work they can perform for reasons outside your control.
Under the Fair Work Act 2009 (Cth), stand down can apply when:
- There is a stoppage of work for which you can’t reasonably be held responsible (for example, a government closure order or a critical supplier shutdown), or
- The employee can’t be usefully employed because of industrial action or a breakdown of machinery/equipment that you couldn’t reasonably prevent.
An enterprise agreement, award or the employee’s contract might modify or add to these rules - and those instruments take priority if they’re more specific. Always check your instrument first.
Importantly, a stand down is not a performance or conduct measure. If you need to manage a misconduct issue, that’s a different process (more on that below).
Stand Down Vs Suspension Or Redundancy: What’s The Difference?
It’s easy to mix up these decisions. Here’s how they differ, in plain English:
- Stand down: Temporary pause in work where there’s no useful work for reasons outside your control. Employment continues, but the employee typically isn’t paid (unless an instrument says otherwise). If your stand down is connected to a workplace inquiry, see this separate process for standing down an employee pending investigation.
- Suspension: Temporary removal from duties (often on pay) for conduct or safety reasons while you investigate. If you’re considering suspension during a workplace inquiry, review your obligations around suspending an employee pending investigation.
- Redundancy: Permanent end of a role because the job is no longer required. This has strict consultation and notice obligations and may involve redundancy pay.
Choosing the right pathway matters. If there is still useful work (even different tasks), stand down may not be available. Sometimes, the better option is to change hours or duties by agreement, which we cover later.
Step-By-Step: How To Prepare And Send A Stand Down Letter
Follow these practical steps to reduce risk and keep your team informed.
1) Confirm The Legal Basis
Write down exactly why you can’t provide useful work. Is it a government directive, supplier shut down, or a genuine stoppage? Keep evidence (emails, notices, order cancellations). You’ll need this if your decision is challenged.
Then, check if an award, enterprise agreement or the employee’s Employment Contract changes your stand down options. Some instruments include extra consultation requirements or pay rules.
2) Consider Practical Alternatives
Before standing someone down, consider whether you can safely and reasonably offer alternative duties, work from another location, training, or adjusted rosters. If you can redeploy, stand down may not be available.
Many employers avoid stand down by agreeing to adjust rosters temporarily. If that’s on the table, get across the rules for reducing employee working hours and ensure any change is properly consulted and documented.
If a staff member asks to take leave instead, you can discuss annual leave or unpaid leave options. Make sure any agreement about leave without pay is recorded in writing.
3) Consult And Communicate Clearly
Even when the law doesn’t require formal consultation, a short meeting and follow-up email builds trust. Explain the reason, what you’ve considered, and why stand down is necessary.
Flag what happens to pay, entitlements, leave options and recall. Invite questions and confirm the best contact details while the employee is away from work.
4) Draft The Stand Down Letter
Your letter should include all the key elements listed in the next section. Keep it factual, empathetic and tailored to the circumstances and any instrument that applies to the employee.
If you have a relevant policy (e.g. critical incident or business continuity) or a general Workplace Policy that guides unusual disruptions, align your letter with that framework.
5) Deliver The Notice And Keep Records
Send the letter by email and, if appropriate, follow up with a paper copy. Note the date/time of delivery and save a copy to the employee’s file alongside your supporting evidence and consultation notes.
6) Monitor And Review
Stand downs should be reviewed regularly. Keep staff updated and end the stand down as soon as there is useful work available. If the situation changes significantly, issue an updated letter confirming the new details.
What To Include In Your Stand Down Letter (Template)
Here’s a practical template you can adapt. Replace the placeholders and make sure it aligns with any award or enterprise agreement that applies to your business.
Private & Confidential Subject: Notice of Stand Down - Dear , We are writing to confirm that, from to , you are stood down from duty under section 524 of the Fair Work Act 2009 (Cth) of the , if applicable]. Reason for stand down There has been a , which means there is presently no useful work available for your position. We have considered alternative duties and redeployment options but, at this time, none are reasonably available. Pay and entitlements During the stand down period, you will of the , if different]. You will continue to accrue in accordance with applicable laws and any industrial instrument. Leave options If you would like to request annual leave or long service leave for any part of the stand down period, please contact at . We will consider reasonable requests in line with our obligations and operational needs. You may also discuss unpaid leave if that suits your circumstances. Communication and updates We will review the situation regularly and update you by at least . Please ensure we have your current contact details. If the stand down ends earlier than anticipated, we will provide reasonable notice for your return to work. Support We understand this is a difficult time. If you need support, please reach out to . Questions If you have any questions about this letter, contact via . Yours sincerely,
This template is a starting point. Tailor it to the employee’s role, any applicable instrument, and your actual arrangements (especially around pay, leave and updates).
Pay, Entitlements And Communication During Stand Down
The default position under the Fair Work Act is that stand down is unpaid, unless an award/enterprise agreement or contract says otherwise. That said, you can agree to an employee taking accrued paid leave during the period.
Keep your letter clear about what accrues during stand down. Typically, service continues for the purpose of accruing certain entitlements, but check the instrument that applies to your team.
If your business position worsens and you later decide to end employment, handle that as a separate process and include the correct notice or payment in lieu of notice as required. A stand down doesn’t remove your obligations if you move to termination.
Good communication is essential. Set a cadence (for example, weekly check-ins), tell employees how you’ll provide updates, and nominate a point of contact. Document each update - it protects both sides and helps avoid misunderstandings.
Key Mistakes To Avoid (And Simple Ways To Reduce Risk)
Standing an employee down is a serious step. Avoid these common pitfalls:
- No “stoppage” or “no useful work” basis: If you still have useful work (even different duties), stand down may not be available. Consider adjusted rosters or duties through consultation, consistent with the rules for reducing employee working hours.
- Not checking instruments: Awards or enterprise agreements can change the rules. Always cross‑check your instrument and ensure your letter reflects it.
- Poor records: Keep evidence of the stoppage, your assessment of “no useful work,” consultation notes, and copies of notices.
- Confusing stand down with discipline: If your issue is conduct or safety, use a different tool such as suspension pending investigation, following the guidance on suspending an employee pending investigation.
- Missing contract terms: Some contracts add steps or rights beyond the legislation. Review the relevant Employment Contract before you act.
- One-way decisions: Where practical, talk to staff about options. You may find a mutually agreeable solution such as annual leave or leave without pay instead of a stand down.
As a final tip, standardising how you communicate major workplace changes in a clear Workplace Policy can help everyone understand what to expect in unusual circumstances.
Key Takeaways
- A stand down letter documents a lawful, temporary pause in work when there’s a genuine stoppage or no useful work for reasons outside your control.
- Confirm the legal basis, check any award or enterprise agreement, and keep evidence before you issue the letter.
- Consider alternatives first, such as adjusted rosters, redeployment or agreed leave - stand down isn’t available if there’s useful work you can offer.
- Your letter should cover the reason, dates, pay/entitlements, leave options, how you’ll communicate, and how recall will work.
- Stand down is different from suspension (investigation) and redundancy (permanent role change) - pick the right path and follow the correct process.
- If stand down leads to termination, handle notice correctly, including any required payment in lieu of notice.
If you’d like help preparing a compliant stand down letter or sense-checking your options, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
