When Do You Have to Pay Termination Payments?

It is not uncommon for employers to have a practice of making termination payments in the next pay cycle following termination of employment. This practice reflects the standard termination provisions in the Pastoral Award, the Horticulture Award and the Wine Industry award amongst many others. These state that termination payments must be paid no later than 7 days after the day on which the employee's employment terminates.

However, the Courts look at the legislation (which overrides the Awards) which provides that all payments due to an employee on termination are payable on the employee’s last day of employment.

What amounts form part of an employee's final pay?

An employee's final pay usually comprises:

1. wages and allowances owing up to the termination.

2. any accrued but untaken annual leave, including annual leave loading,

and, depending on the circumstances, might also include:

1. payment in lieu of notice;

2. redundancy pay; and/ or

3. accrued or pro-rata amounts owing in respect of long service leave.14

Again, failing to comply with the legislation and paying the entitlements when due can lead to large fines being imposed on the employer.