Termination of Employment – Award Changes
From 1 November 2018 termination rules contained within a number of Australian Awards have changed.
Timing to make termination payments
In a large number of Awards, employers will now be required to ensure that an employee’s wages and all other entitlements are paid within seven (7) days from the end date of their employment.
The decision to make this change is part of the Fair Work Commissions 4 yearly review of modern Awards. The decision recognised that some Awards were silent in respect to the time period within which termination payments were to be made. In others, it was not sufficient for termination payments to be made in accordance with the employee’s usual pay cycle, because for some employees this meant having to wait for up to a month.
Deductions for failing to provide notice
Award changes have also been made to the amount an employer can deduct if an employee resigns without giving enough notice.
Previously, some Awards allowed employers to deduct payment equivalent to the notice period specified in the National Employment Standards (NES) which varied according to the employee’s length of service. The new requirements now limits employers to deducting no more than one (1) week’s wages, so long as the employee is at least 18 years old.
For example: Maree is a Senior Retail Sales Consultant covered by the General Retail Industry Award. She resigns from her employment and leaves the same day, without offering to work out the required notice period in her Award. Her employer may deduct from wages due to her an amount that is no more than one (1) week’s wages from her final termination pay.
Other Changes
Some other Award clauses have also changed as part of the Fair Work Commissions 4 yearly review. These include consultation requirements, dispute resolution and individual flexibility arrangements. Therefore, before making any changes or processing an employees termination, employers should check the precise rules in their applicable Award or Registered Agreement as these could provide for different arrangements.
Failure to comply with Award requirements will expose your business to legal claims and penalties.
If you need some extra support managing your employees or your employer obligations don’t hesitate to contact us at Human Resource Services on (07) 5530 1571.
