You should ask the company for the exact nature of the allegation against you before you reply.
You should take a witness to any meeting which the company calls, but not a witness from within the company.
You should receive the allegation in writing and ask for a reasonable time to respond. The company may be intending to dismiss you because it will be easier to do that than face a controversial sexual harassment claim from your accuser. However you may wish to take action while you are being stood down and not wait until you have been dismissed before claiming wrongful dismissal. In certain circumstances the accuser of the false allegations may be liable to pay you damages for defamation, especially if that defamation causes you to lose your job. Your initial dispute is with the accuser, rather than the company itself.
The company may not dismiss you if it is aware that you have taken action against the fellow employee to defend your good name. It will come as a shock to the accuser to be sued for defamation and it may be that the best way out for the accuser is to make an apology to you which will assist you to save your job. This will also be effective for saving the other employee a substantial amount of legal costs and a payout. The overall result might well be that you can hold on to your job and that the accuser is dismissed for wilful unlawful serious misconduct for making the false allegation.
Not all companies however will back you and it may be that you will be dismissed even though you have commenced defamation proceedings. You can then decide whether or not to issue wrongful termination of employment proceedings against your employer or whether you merely rely upon your legal proceedings against the accuser. It is a better position for you to have more than one option, especially because a payment for defamation will be treated differently to a payment from an employer in terms of the taxation payable.
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