Changes to the final/termination payment clause in select awards

Most modern awards contain a ‘final/termination payment clause’ which outlines the employer’s obligations to pay outstanding wages and entitlements when the employment ends (this is usually 7 days after the termination date).

The Fair Work Commission has recently announced changes to the final/termination payment clause under the following awards:

• the Business Equipment Award 2020 [MA000021];
• the Electrical, Electronic & Communications Contracting Award 2010 [MA000025]; and
• the Building and Construction General On-site Award 2010 [MA000020].

 

This follows earlier changes made to the:

• Manufacturing Associated Industries and Occupations Award 2020 [MA000010];
• Graphic Arts, Printing and Publishing Award 2010 [MA000026];
• Food, Beverage and Tobacco Manufacturing Award 2010 [MA000073].

 

We explain the changes below.

Requirements relating to paying out long service leave will not be covered by the award provisions and so employers should seek advice regarding the specific long service legislation in their State or Territory.

 

Business Equipment Award & Electrical Contracting Award

Employers now need to pay their employees:

• their final wages (including payment for accrued RDOs) by the end of the next business day after the employment ends;
• all other amounts, including NES entitlements that need to be paid out (such as annual leave) within 7 days of the employment ending.

 

Building & Construction On-Site Award

Where notice of termination is given by an employee or employer, the employee’s outstanding wages need to be paid:

• on their last day of employment; or
• within 2 working days of the employment ending.

 

Payment can be made by registered post or electronic funds transfer (EFT) if the employee is normally paid by EFT.

Where employment ends without any notice of termination being given, outstanding wages need to be paid:

• on their last day of employment; or
• by EFT within 7 days of the employment ending.

 

All other amounts that need to be paid out on termination (such as accrued annual leave), need to be paid:

• on the employee’s last day of employment; or
• by EFT within 7 days of the employment ending.

 

Manufacturing Awards and the Graphic Arts Award

Employers covered by these Awards now need to pay any outstanding wages owed to an employee by the end of the next business day after the employment ends. For example, if the employment ends on a Monday, then the employee’s wages will need to be paid by the end of Tuesday. This is regardless of what the usual pay cycle is for that business.

The employer must pay any outstanding NES entitlements (such as annual leave) within 7 days of the employment ending.

 

Employees leaving without giving sufficient notice

All six awards listed above continue to contain a provision which allows employers to deduct amounts from an employee’s wages where an employee leaves without providing sufficient notice. In all awards except the Manufacturing Associated Industries and Occupations Award 2020, this is limited to one weeks wages and deductions are only possible where the employee is at least 18 years old.