December 12, 2019

The time frame for termination pay now clarified in 92 Australian Awards

Time frame for termination pay now clarified in 92 Australian Awards

12 December 2019 

On 11 December 2019, the Fair Work Commission published a decision that means 3 more industries will now give employee's transparency about the timing of their final termination pay in their Awards. 

Below I will cover the the Award changes, the original November 2018 change for 89 other industry Awards and the model clause.

In a hurry? you can jump ahead below.

Retail Industry Award 2010

The Rail Industry Award 2010 will now include the same clause for termination pay within 7 days after initially opposing its addition.

Alpine Resorts Award 2010 

There’s a slight variation for the Alpine Resorts Award, employee’s now have certainty they will be paid their  termination entitlements within 14 days of their termination date. But for employees paid weekly, they will be paid by the end of their next complete 7-day period. 

Pharmacy Industry Award 2010 

Employees covered by the Pharmacy Industry Award will be paid no later than 14 days after the employee’s termination date. The reasoning for this decision is that a large percentage of businesses  in the Pharmacy Industry are small businesses without dedicated bookkeeping staff and the cost of paying within 7 days will be much higher.

Previous change - 89 Awards that include model clause

Back in November 2018, many employees across Australia became entitled to be paid their termination pay within 7 days of a termination because of a new clause that was added to 89 Australian Awards.  

You can get the full list of Awards with the clause here.

Below is an excerpt of 12 from that list that cover many Australian employees: 

  • Banking, Finance and Insurance Award 2010 
  • Clerks - Private Sector Award 2010 
  • Educational Services (Teachers) Award 2010 
  • Fitness Industry Award 2010 
  • General Retail Industry Award 2010
  • Hair and Beauty Industry Award 2010 
  • Legal Services Award 2010 
  • Miscellaneous Award 2010 
  • Pharmaceutical Industry Award 2010 
  • Real Estate Industry Award 2010 
  • Security Services Industry Award 2010 
  • Social, Community, Home Care and Disability Services Industry Award 2010

The model clause

 Here's what the clause for payment within 7 days looks like: 

X. Payment on termination of employment

(a) The employer must pay an employee no later than 7 days after the day on which the employee’s employment terminates:

(i) the employee’s wages under this award for any complete or incomplete pay period up to the end of the day of termination; and

(ii) all other amounts that are due to the employee under this award and the NES.

(b) The requirement to pay wages and other amounts under paragraph (a) is subject to further order of the Commission and the employer making deductions authorised by this award or the Act.

Note 1: Section 117(2) of the Act provides that an employer must not terminate an employee’s employment unless the employer has given the employee the required minimum period of notice or “has paid” to the employee payment instead of giving notice.

Note 2: Paragraph (b) allows the Commission to make an order delaying the requirement to make a payment under clause X. For example, the Commission could make an order delaying the requirement to pay redundancy pay if an employer makes an application under section 120 of the Act for the Commission to reduce the amount of redundancy pay an employee is entitled to under the NES.

Note 3: State and Territory long service leave laws or long service leave entitlements under s.113 of the Act, may require an employer to pay an employee for accrued long service leave on the day on which the employee’s employment terminates or shortly after. 

Got questions or comments about this Fair Work change to Awards? Be sure to leave them below. 


About the author 

Vivian Michael

As founder and lawyer at Michael Law Group, Vivian advises Australia's top entrepreneurs on business and employment matters. Clients benefit from Vivian's commercially focussed and pragmatic legal advice, business experience, and commitment to deliver the best quality business legal services to her clients.

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