This has got to be hard to manage if you’re in HR or running payroll.
I've posted before about the need to make payments in lieu of notice by the last day of an employee's employment (see the comments).
It seems that annual leave payments also have the same requirement.
Section 90(2) of the Fair Work Act provides that if, ???????? ?????? ???????????????????? ???? ???? ???????????????? ????????, the employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been payable to the employee had the employee taken that period of leave.
Most employers treat this as meaning "around" the time the employment ends and pay it within seven days or in their next pay cycle.
However, in the recent case of ???????????? ?? ???????? ?????????????? ?????? ?????? the Federal Court determined that this means the last day of the employment.
In fact, it fined HEAD Oceania $17,000 for failing to pay an employee $8,022.22 in accrued annual leave by the last day of their employment.
The payment was about 3 months late, but still, the requirement to pay by the last day of employment was made clear.
What about long service leave entitlements?
Long service leave payments are determined on a state-by-state basis, but most states also require LSL payments to be made on termination. For instance, in NSW the payment must be made "forthwith" on termination (ie immediately) and in Victoria it must be made on the day of termination.
Redundancy payments under the NES seem to have escaped this requirement, because the language in the provisions doesn't point to it being payable on the day of termination. For award-covered employees, redundancy payments would likely be subject to the award requirement for payment of NES entitlements, which is often 7 days after termination.
Few employers comply with the various requirements to pay entitlements on the day of termination. But, as we know, there are many areas of payroll compliance that have previously been thought not to matter and now do. This is likely to be another one.
Thanks to Isaac Hawkins for his helpful input on this post.
#humanresources #management #payroll #employmentlaw #HR
Office Specialist - Manhattan Beach Unified School District
9 个月Congrats Katy! A honor well deserved.