Standing down an employee pending investigation is one of the most difficult decisions any business owner can face. Whether you run a startup, a retail store, or a growing team, these moments can feel daunting, confusing, and even overwhelming - especially as you try to balance your obligations to staff, maintain workplace fairness, and comply with Australia’s complex employment laws.
At Sprintlaw, we’re often asked: “Can I stand down an employee while I investigate alleged misconduct or complaints?” The short answer is: yes, but only in certain situations, and following a very strict, fair process. Missteps - even well-intentioned ones - can have lasting legal, financial, and reputational consequences for your business.
In this guide, we’ll break down what it really means to "stand down" an employee, when it’s lawful, your step-by-step legal obligations, and the best practices to protect everyone involved. With the right knowledge and documentation in place, you can navigate workplace investigations confidently and reduce legal risks along the way.
What Does It Mean To Stand Down An Employee Pending Investigation?
Standing down an employee pending investigation is when you temporarily remove someone from their normal work duties, usually with pay, while you conduct a workplace investigation into alleged misconduct or a serious incident.
It’s often used in situations like allegations of workplace bullying, harassment, theft, or breaches of safety. The purpose isn’t to punish the employee, but to ensure a fair, unbiased investigation, protect the interests of all parties, and maintain a safe, productive workplace.
You’ll often hear the terms “stood down pending investigation,” “stood down with pay pending investigation,” or simply “stand down employee pending investigation.”
It’s critical to remember: standing an employee down is a serious step, only to be used where it’s absolutely necessary and legally justified. Every Australian employer must comply with the Fair Work Act 2009 and any applicable Modern Award, Enterprise Agreement, and employment contract.
When Can You Lawfully Stand Down An Employee Pending Investigation?
This is one of the most common - and also most complex - questions for business owners. Australian law makes it clear: employers can only stand down an employee in very limited circumstances. Here’s what you need to know.
1. By the Fair Work Act 2009
Section 524 of the Fair Work Act 2009 allows an employer to stand down employees without pay in situations where they cannot be usefully employed because of certain events - for example, industrial action, breakdown of equipment, or stoppage of work not caused by the employer. It does not give you a right to stand someone down during an internal investigation simply because there is an allegation of misconduct.
2. Employment Contract, Award, or Enterprise Agreement
Most lawful stand downs “pending investigation” occur because the right is written into the employee’s contract of employment, a Modern Award, or Enterprise Agreement. Here are some examples:
- Your employment contracts include a clause allowing for paid stand down during investigations.
- The relevant Modern Award or Enterprise Agreement sets out stand down procedures and conditions.
If your contract or award doesn’t mention stand down rights, you may not be able to lawfully stand the employee down, except in very narrow circumstances. It’s essential to review all relevant employment agreements and awards before taking any action - if you’re unsure, our employment law experts can assist with a review.
3. Lawful and Reasonable Direction
Employers do have a general right to give employees “lawful and reasonable directions.” If standing down an employee is necessary to ensure a fair investigation - for example, to protect witnesses, prevent evidence tampering, or maintain workplace safety - you may direct the employee to remain off-site, provided it’s on full pay unless otherwise agreed. However, if it’s not permitted by contract or award, this should be a last resort and only used where absolutely necessary.
Do I Have To Pay An Employee While They Are Stood Down?
This is a crucial point, and an area where many employers run into legal trouble. In most cases, if you stand down an employee pending investigation, it should be on full pay unless the contract or award explicitly allows otherwise.
- Stood down with pay: This is the norm for pending investigations where the employee is otherwise willing and able to work, but you require them to be off-site for investigation purposes.
- Stood down without pay: Only possible where the employment contract, relevant award or industrial instrument, or the Fair Work Act specifically allows for it. In most workplace investigations, this does not apply.
Withholding pay without legal cause can amount to a serious breach of contract and risk claims of “constructive dismissal” or unfair treatment. Making the wrong call here can be costly.
Step-By-Step: How To Stand Down An Employee Pending Investigation The Right Way
If allegations arise in your business - for example, accusations of bullying, workplace harassment, theft, or serious misconduct - you may feel pressure to act fast. But it’s crucial to follow a fair, transparent process to avoid legal claims and to ensure fairness for all involved.
Here’s how to manage the situation lawfully:
1. Assess The Situation
- What are the allegations or risks? Are people’s safety, wellbeing, or the business’ reputation at stake?
- Is there a genuine need to remove the employee from the workplace (for example, to prevent interference in the investigation or protect others)?
- Is there a valid legal right to stand down the employee (check employment contract, Modern Award, or Enterprise Agreement)?
2. Seek Advice & Check Your Documentation
- Review the employee’s contract of employment, the relevant Modern Award or Enterprise Agreement, and your workplace policies.
- If you’re unsure about your rights as an employer, get legal advice first - an early consultation can save every party headaches later. Sprintlaw’s guides on employment obligations and employee rights are a great starting point.
3. Communicate Clearly With The Employee
- Notify the employee in writing (letter or email) of your intended action and the reasons for it.
- Explain the stand down will be pending the outcome of an investigation, the expected timeframe, and whether it will be with or without pay (in most cases, with pay).
- Outline any expectations - such as staying away from the workplace or not contacting colleagues or witnesses - and offer support (e.g. Employee Assistance Program).
4. Conduct A Prompt And Fair Investigation
- Carry out a fair, unbiased investigation. Give the employee a chance to respond to allegations and provide evidence. Document everything.
- Ensure the investigation is confidential, conducted as quickly as reasonably possible, and that the employee is given regular updates. Prolonged investigations without good reason can increase legal risks.
- You may wish to refer to our workplace policies for more on structuring fair investigations and discipline in your business.
5. Notify The Employee Of The Outcome
- Once the investigation is concluded, promptly communicate the findings and any next steps (e.g. return to work, formal warnings, disciplinary action, or in rare cases, termination).
- Provide written outcomes and ensure the process complied with all legislative and policy obligations.
6. Maintain Good Records
- Keep detailed written records of all correspondence, meetings, and steps taken.
- This documentation is your best defence against unfair dismissal or adverse action claims in the future.
What Legal Documents And Policies Should I Have In Place?
Every business needs a solid legal foundation - workplace policies and contracts aren’t just paperwork: they’re your blueprint for managing tricky staff situations the right way. Here’s what to have in place:
- Employment Agreement: This should clearly set out your right to stand down employees (pending investigation), specify pay conditions, and outline disciplinary procedures.
- Workplace Policies: A Staff Handbook, equal opportunity, anti-bullying, harassment, and workplace health and safety policies are essential. These guide everyone’s behaviour and the process for handling complaints and investigations.
- Grievance and Complaints Policy: This outlines how complaints are made, how investigations are run, and who to contact. See our guide to a strong complaints policy for best practices.
- Stand Down or Suspension Clause: This clause (in your Employment Agreement or Policy) gives you the clear right to stand down employees in certain cases, setting out the process and conditions.
- Communication and Confidentiality Agreements: These protect the investigation’s integrity and privacy for all parties involved.
Not sure if your documents are fit for purpose? Our team can review your current employment contracts and workplace policies and help you put the right structure in place.
What Are The Risks Of Unlawful Stand Down?
Acting outside of your lawful rights when standing down an employee can lead to significant legal headaches, including:
- Unfair Dismissal Claims: If the stand down is deemed unreasonable, punitive, or not permitted, the employee might claim constructive dismissal or bring an unfair dismissal claim before the Fair Work Commission.
- Breach of Contract: Withholding pay or breaching agreed procedures (without clear legal grounds) could see you liable for damages.
- General Protections (Adverse Action) Claims: If the employee believes they’ve been targeted for unlawful reasons (such as making a complaint, union activity, or discrimination), they may lodge a general protections claim.
- Reputational Damage: Poor processes can result in loss of trust from your employees (and the public), making future recruitment and retention harder.
The best way to avoid these risks? Always act with procedural fairness, follow your written policies and agreements, and seek legal advice before taking significant steps.
Standing Down Employees For Other Reasons
Remember, standing down is different from redundancy, termination, or forcing annual leave. There are special rules for permanent stand down (for example, where a business cannot operate due to a disaster), which you can learn more about in our annual leave guidance.
Best Practices: Treating Your Employee Fairly & Minimising Legal Risk
- Act Proportionally: Only remove an employee from their work duties when less-restrictive options (such as changing duties or locations) are insufficient.
- Pay Wages Unless Clearly Otherwise: Unless a contract, award or the law says otherwise, pay normal wages and entitlements.
- Keep It Confidential: Respect privacy - only those with a direct need to know should be told about the stand down and investigation.
- Communicate Regularly And Respectfully: Keep the employee informed throughout, check in regarding their wellbeing, and outline what support (like EAP) is available.
- Don’t Rush Or Drag Out Investigations: Move promptly, but allow enough time for fairness, and avoid unnecessary delays.
- Document Everything: Keep clear records of every decision and correspondence. This is your best defence if things are later challenged.
- Seek Timely Legal Support: If you’re in doubt, it’s always safer to get clear advice before acting. Sprintlaw’s legal experts are here to help you safeguard your business and reputation.
Key Takeaways
- Standing down an employee pending investigation is lawful in Australia only in specific circumstances, usually under a contract, award, or by reasonable direction - and it must be managed fairly.
- Unless your contract or award states otherwise, employees should be stood down with pay while an investigation is underway.
- You must communicate clearly, document all steps, and act proportionally, maintaining confidentiality and procedural fairness.
- Ensure your business has up-to-date employment contracts, workplace policies, and a documented process for handling complaints and investigations.
- Acting unlawfully exposes your business to unfair dismissal, breach of contract, and adverse action claims - so seek professional advice if you’re unsure.
- Having a plan, being prepared, and staying transparent with staff is the best way to mitigate conflict and keep your workplace safe and fair.
If you would like a consultation on how to stand down an employee pending investigation - or want help reviewing your workplace policies and contracts - contact us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
