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Can you suspend an employee without pay?

This question was recently sent to our Workplace Advice Line.
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Can you suspend an employee without pay?

Can you suspend an employee without pay?

3 September 2020

Can we suspend an employee without pay while investigating an incident of alleged misconduct?

This question was recently sent to our Workplace Advice Line.
 
Q Our company suspended an employee after he physically assaulted another employee. The incident was recorded on CCTV footage. The suspension was to provide time for the company to conduct a thorough investigation of the incident.

We arranged a meeting with the employee two days later and his behaviour and explanation for it were not considered satisfactory. It was decided to summarily dismiss the employee on the grounds of serious breach of the company’s bullying and harassment policy.

In a separate incident, the employee had recently received a final written warning because of abusive behaviour towards the same employee. There is no provision in the employee’s contract of employment or applicable award which relates to suspension without pay.

Is the employee paid for those two days while suspended and, if not, should the two days be deducted from annual leave pay due on termination of his employment?
 
A The right to suspend without pay may arise under the terms of the employee’s contract of employment, the relevant statute, or the terms of the applicable modern award. However, in the absence of such a provision, there is no general common law right  to suspend an employee without pay due to their misconduct, such as pending an investigation, even where their misconduct would justify instant dismissal.

This means the employee must be paid for the period he was directed not to attend for work. Consequently, the circumstance of taking annual leave for the period of suspension does not arise.
 
See Australian Workers’ Union v Stegbar Australia Pty Ltd [2001] FCA 367.


Fair Work Commission

Some modern awards or enterprise agreements contain provisions relating to suspension of an employee but, generally, the employer has no automatic right to suspend an employee without pay, such right being limited to stand down provisions.

The Fair Work Commission may have the power to effectively suspend an employee as a remedy to an unfair dismissal claim, although this is usually applied in cases involving an act of serious misconduct.


Stand down v suspension

The concept of 'stand down' is often confused with the concepts of 'suspension' and 'no work, no pay'. The ‘standing down’ of an employee should not be confused with the suspension of an employee, as stand down is designed to deal with a situation where an employee cannot be usefully employed for any reason beyond the employer’s control and, consequently, the affected employee(s) is not paid for the period of the stand down. See Coal & Allied Mining Services Pty Ltd v MacPherson [2010] FCAFC 83.
 
The bottom line: Suspension without pay is only permitted where allowed under the terms of an applicable modern award or enterprise agreement, the relevant statute, or the terms of an employee’s contract of employment.
 

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