Stand-down and suspension

“Stand down” and “suspend” are not interchangeable. One is a narrow statutory power to stop paying for work that genuinely doesn’t exist. The other needs a basis of its own, and getting that basis wrong can turn a routine investigation into a repudiation of the contract.

What you’ll be able to do

• Apply the narrow statutory test for standing an employee down without pay under s.524, and recognise when a withdrawal of work isn’t a stand down at all.
• Explain why suspension pending a disciplinary investigation needs its own legal basis, and why paid suspension carries far less risk than unpaid.
• Spot the pattern where an employer calls something a “stand down” to justify not paying someone, with nothing in s.524 or the contract to support it.

Statutory stand down: s.524

Section 524 lets an employer stand down an employee without pay during a period in which the employee cannot usefully be employed because of one of three specific causes:

This is not a general “we have no work for you” power. It doesn’t cover a quiet trading period, a lost contract, or a manager deciding someone is surplus to requirements for the week. It only applies where the employee cannot usefully be employed, and that inability has to be caused by one of the three things above.

A Full Bench put the limiting principle squarely: s.524 “concerns circumstances in which there is an absence of work to be done, rather than a circumstance in which there is work to be done but the employee is not willing to perform it” [2025] FWCFB 274 at [52]. The premise of the whole section is that the employee is ready and willing to work and there’s genuinely nothing for them to do.

The two-step test

The Commission applies a two-step test to decide whether a stand down is authorised:

1. Can the employee be usefully employed during the stand-down period? If there’s useful work available — anywhere in the business, not just in the employee’s usual role — s.524 doesn’t apply and no further inquiry is needed.
2. If not, is that because of one of the three causes in s.524(1)? Where the cause relied on is a stoppage of work, the employer additionally has to show there was an actual stoppage, and that it can’t reasonably be held responsible for it [2024] FWC 3306 at [149].

In APESMA v Wollongong Resources, a coal mine was stood down after a government regulator issued a Prohibition Notice stopping coal production outright. The Commission found there was a genuine stoppage of work, no useful work available, and — critically — that the employer had engaged independent experts, cooperated with the regulator, and taken every reasonable step to lift the notice. That combination meant it could not reasonably be held responsible for the stoppage, and the stand down was lawful [2024] FWC 3306 at [149]. Contrast that with a stoppage the employer caused or dragged its feet on fixing — the same test would likely go the other way.

Industrial action is a cause, not a label

The industrial-action limb catches genuine attention: it’s tempting to assume that if an employee is engaged in protected industrial action and isn’t being paid, s.524(1)(a) must apply. It doesn’t automatically. The cause has to be that the industrial action means there’s no useful work at all — not that the employee has declined to do a particular task as part of a work ban while other useful work exists. A Full Bench corrected exactly this error on appeal, where a Commissioner had treated an employee’s refusal (as protected industrial action) to accept redeployment to another ward as itself satisfying s.524(1)(a), even though there was useful work available on that other ward [2025] FWCFB 274 at [53].

Suspension pending a disciplinary investigation

Suspension is a different tool entirely, and it is not a standalone statutory right. There is no equivalent of s.524 that lets an employer suspend an employee — paid or unpaid — simply because it wants to investigate an allegation. The power to suspend has to come from somewhere: an express term of the contract of employment, an award, an enterprise agreement, or some other statutory source.

Where that basis exists and is followed, suspension pending investigation is routine and low-risk. In Kerig v Victoria University, the applicable enterprise agreement set out a clear two-step clause: first, whether the relevant officer considered the allegations serious enough to warrant the employee not being at work [2020] FWC 1461 at [63]; second, whether the resulting suspension should be with or without pay. Because the University followed that clause, the Commission found it had proper grounds to commence the misconduct process and to suspend the employee without pay while it did so [2020] FWC 1461 at [146].

Where there is no such basis, unpaid suspension is exposed. A Federal Court decision squarely on this point has been quoted, in a litigant’s own correspondence, for the proposition that “at common law, an employer has no right to suspend an employee without pay” [2022] FWC 1530 at [18]. That authority is not independently verified against its own text in this pass — see the note under Decisions cited — but the underlying point is consistent with everything else in this module: withholding pay needs a source of authority, and “we’re investigating” isn’t one by itself.

Paid suspension is a different risk category. If an employee keeps being paid while an investigation runs, the financial harm that drives most disputes about stand down and suspension simply doesn’t arise, and there’s rarely an incentive to litigate the suspension decision itself (as opposed to what the investigation ultimately finds). Unpaid suspension, by contrast, puts the employer squarely in the position of withholding money owed under the contract — and if there’s no clause, award term or statute that allows that, the employer is at serious risk of repudiating the contract.

Withholding pay without a basis is repudiation risk, not a free option

The clearest illustration in this corpus of what happens when an employer withholds work and pay with no basis in either the contract or s.524 is Poulter v JA Concreting — not framed as a disciplinary suspension, but the underlying principle is identical. The applicant’s own submission captured it directly: “an employer does not have the right to stand an employee down without pay at common-law” [2025] FWC 1441 at [11]. The Commission agreed there was no evidence any of the s.524(1) causes existed [2025] FWC 1441 at [25], and found that withholding work and pay without authority amounted to a repudiation of the contract which the employee had accepted — meaning the employment was terminated at the employer’s initiative [2025] FWC 1441 at [29]. The same reasoning applies whether the employer calls it a “stand down” or a “suspension”: the label doesn’t matter, the authority does.

What the Commission looks for

• For a s.524 stand down: a specific, identifiable cause within s.524(1)(a)–(c); genuine absence of useful work (checked across the business, not just the employee’s usual duties); and, for the stoppage-of-work limb, evidence the employer took reasonable steps and isn’t itself responsible for the stoppage.
• For suspension pending investigation: an actual source of power — a contract clause, award term, enterprise agreement clause, or statute — that was properly engaged; whether the decision to suspend (and whether to withhold pay) followed whatever process that source requires; and, if unpaid, whether there was any evidential basis for withholding pay specifically, as distinct from suspending at all.

How it goes wrong

Adviser checklist

Practice scenario: the warehouse and the “stood down” email

Decisions cited

Check each paragraph reference against the published decision before relying on it. Avenia v Railway & Transport Health Fund Ltd [2017] FCA 859 is a Federal Court decision squarely on suspension pending investigation, but its own text could not be reconstructed from the chunk snapshot in this pass — it is quoted only as reproduced in a litigant’s letter in another decision, and needs checking against the original judgment. Rows marked “partial” confirm only the specific proposition pinpointed, not every finding in that decision.