Awards and enterprise agreements include terms about paying full-time and part-time employees for fixed or agreed hours of work and have requirements to consult employees about major workplace change and changes to rosters or hours.

When an employer is required by an enforceable government direction to temporarily reduce staffing levels, they should consider their obligations under an award or enterprise agreement and consider the available options, including:

• agreeing to alternative work arrangements with employees
• requesting or directing employees to take leave
• standing down employees
• seeking employees' agreement to work reduced hours.

Fair Work Act

The Fair Work Act provides that awards and enterprise agreements are subject to enforceable government directions under state and territory laws that restrict the performance of work in emergency situations. This means that an enforceable government direction requiring a reduction in staffing levels may override some of an employer's obligations under an award or enterprise agreement.

Where this occurs, an employer may be able to reduce employees' hours below those set under an award or enterprise agreement and not pay employees for the hours they don't work. Other relevant terms of an award or enterprise agreement, such as terms requiring consultation with employees, may also be overridden by the enforceable government direction in some circumstances.

The availability of this option for employers affected by an enforceable government direction hasn’t been tested in the courts and may be subject to different views. It’s only likely to be available to the extent that an enforceable government direction requiring reduced staffing levels makes it reasonably necessary to reduce employees’ hours below those ordinarily set under an award or enterprise agreement. This will depend on the circumstances and how the award or enterprise agreement interacts with the enforceable government direction. You should consider seeking independent legal advice if you’re considering this option.

Employers can’t use this option if they’re only indirectly affected by an enforceable government direction. For example, if an employer experiences a disruption to its supply from another business that has been required by an enforceable government direction to close, the employer can’t rely on this option to reduce their employees’ hours of work.

Employers have some discretion about how they choose to implement reductions in staffing across their workforce. However, under the general protections in the Fair Work Act, employers cannot take adverse action against employees for a prohibited reason, such as the person’s race, sex, marital status, pregnancy or union or non-union membership. See Protections at work.

Jobkeeper provisions before 29 March 2021

From 9 April 2020 to 29 March 2021, eligible employers were also able to use the Fair Work Act JobKeeper provisions to reduce staffing levels.

For more information see Former JobKeeper scheme overview.