Lessons from the A-League: Standing down players without pay

The Coronavirus pandemic has impacted employers and employees alike and many have been detrimentally affected financially. This is not only limited to owners of football clubs. There are a few things to keep in mind when making a decision to stand down employees without pay. In the following situation we refer to the players of The A – League being stood down during this pandemic. The owners of the clubs say they are seeking to ensure the club’s long-term survival while the Players Football Association is threatening legal action.

At the beginning of 2020, the A-League – Australia’s premier football league – was in the midst of a season and only a few weeks away from a finals series. Now, following a number of rounds “behind closed doors”, this A-League season – along with many other sporting codes – has been suspended indefinitely.

Further, owners for many of the existing clubs – including Brisbane Roar, Perth Glory and Adelaide United – have taken a drastic step of indefinitely standing down their employees (including players and staff) without pay.

The owners of the clubs say they are seeking to ensure the club’s long-term survival while the Players Football Association is threatening legal action. In this regard, all employers who have been detrimentally affected financially by the coronavirus pandemic (not just owners of football clubs) must keep the following in mind when making any decision to stand down employees without pay.  

Fair Work Act

The Fair Work Act 2009, specifically section 524, sets out the certain circumstances upon which an employer may stand down an employee without pay. Indeed, the employer may only stand down an employee without pay in circumstances where the employee cannot usefully be employed and this is because one of the following circumstances:

  • Industrial action (other than industrial action organised or engaged in by the employer);
  • A breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown; or
  • A stoppage of work for any cause for which the employer cannot be held responsible.

In situations where there is an enterprise agreement or contract of employment, an employer may not rely on one of the above circumstances to stand down an employee without pay. This is an important part of the Act to note as an agreement provides alternate terms/conditions of standing down in that circumstance.

For example, a collective bargaining agreement or a contract of employment may include terms that impose additional requirements that an employer must meet before standing down an employee (e.g. requirements relating to consultation or notice, or a prohibition of standing down without payment in that circumstance).

Further, the Fair Work Act, specifically section 340, sets out that an employer must not take adverse action against its employees where an employee is exercising a workplace right. In this regard, the players may seek to argue that the decision to have them stood down without pay constitutes adverse action. However, the Act stipulates that such a claim would not succeed in circumstances where the employer’s decision is authorized by law (see above s 524) or a governing contract/enterprise agreement.

Collective Bargaining Agreements                                                 

In the situation of the Australia Premier Football League, the Collective Bargaining Agreement provides the framework within which the players, clubs and FFA operate and includes key provisions relating to scheduling, players rights and entitlements.  

The A-League, W-League, Matildas and Socceroos Collective Bargaining Agreements (CBAs) are collective agreements between Football Federation Australia (FFA) (on behalf of itself and the Clubs) and the Professional Footballers Australia (PFA) (on behalf of the players). The Collective Bargaining Agreements importantly provide the framework within which the players, clubs and FFA operate and includes key provisions relating to scheduling, player rights and entitlements.

In determining the validity of the club owners’ decision to stand down their employees without pay (specifically for the players), alternative options would need to be provided for in the Collective Bargaining Agreements or in the individual employment contracts. The PFA must point to a provision in their employment contract or CBA which provides alternate terms/conditions of employment in the current circumstances.  

JobKeeper Payment

The federal government continues to take steps to maintain the financial viability of businesses significantly impacted by the coronavirus outbreak. In the background of these provisions under the Act, the Job Keeper payment allows such eligible businesses to access a subsidy from the Government ($1,500 per fortnight per eligible employee) to encourage the ongoing retention of employees.

It is encouraged that employers consider their eligibility for the JobKeeper payment prior to taking any adverse steps against their employees.

Find our more by reading our Jobkeeper Payment article here.

If you need assistance in effecting employee stand down, contact us.

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