Do We Need to Pay our Staff if We Shutdown During a Natural Disaster?

Natural Disasters can be a scary and confusing time, causing devastation to businesses, individuals and communities. At the time of writing this blog, Cyclone Alfred is heading straight for Brisbane, where the Aegis Head Office is located.

At a time when the “cost of living crisis”, recent Christmas break, and upcoming Easter and ANZAC Day public holidays are causing stress on business’ cashflow, you might be worried about having to pay your staff if you shutdown your business this week due to Cyclone Alfred.

The first place to check whether you are required to pay your staff during a shutdown due to a natural disaster is their Award or EBA. These documents will override the Fair Work requirements. Some Awards or EBAs may require you to pay normal wages for the natural disaster shutdown. Be aware that a natural disaster shutdown will most likely have different treatment (or clauses in your Award / EBA) than a shutdown due to inclement weather or Christmas closedown or lack of work, so be sure to check the requirements.

If your Award or EBA is silent on shutdowns during natural disasters, then the Fair Work requirements apply. “Under the Fair Work Act, employers can stand down employees without pay where they can’t be usefully employed in certain circumstances. This includes where there is a stoppage of work caused by natural disasters, such as bushfires or floods.” In this situation, employers can't stand an employee down just because the business is quiet or there isn't enough work due to bad weather.

Fair Work suggests that prior to a complete shutdown / standdown, employers should consider alternative options such as working from home, moving staff to a different worksite, approving annual leave during this time.

Here’s the link to the appropriate page on the Fair Work website: https://www.Fair Work.gov.au/pay-and-wages/pay-during-inclement-or-severe-weather-natural-disasters

Of course, these are the minimum requirements. As business owners and management, you can choose to override these provisions with a higher beneficial option. If cashflow is going well and/or you want to maintain additional goodwill with your staff, you may consider paying normal hours without reducing the employees' leave entitlements. Some of our clients are allowing staff to go into negative TOIL (Time off in Lieu) and work back the TOIL over the coming weeks. Only you will know which of these options is right for your business. As long as you’ve covered the minimum required under your Award / EBA or Fair Work, you should be fine. (Not legal advice!)

All in all, stay safe!