Employee termination payments can be fiendishly difficult to calculate. There are a multitude of different payments which could be made depending on the individual employee’s circumstances. Who terminated the employment – the employer or the employee – also has an effect on the calculation.
This great infographic from HR Advance who we are professional partners of attempts to make sense of termination payments by listing the most common components, as well as explaining some of the most common calculations. Check it out HERE
Withholding annual leave payments: some further explanation
To explain this further how annual leave accrual payments can be withheld in certain circumstances if the employee fails to provide adequate notice, most modern awards allow an employer to withhold monies on termination, including monies due under the National Employment Standards (such as pro rata annual leave pay), where the employee fails to give the employer the proper notice of termination required under the award. For example, a common provision is contained in the Manufacturing and Associated Industries and Occupations Award 2010, which states that “if an employee fails give the required notice the employer may withhold from any monies due to the employee on termination under the award or Standards, an amount not exceeding the amount the employee would have been paid under this award in respect of the period of notice required by the award less any period of notice actually given by the employee.”
While this interpretation has not been the subject of judicial review, it is the view of the Fair Work Ombudsman that such an award term complies with s.90(2) of the Fair Work Act for the purpose of paying annual leave on termination of employment.
In the case of long service leave, this would be subject to the provisions of the relevant state or territory long service leave legislation, although it is generally held that long service leave payable on termination cannot be forfeited or withheld unless the employee is subject to (say) a court order such as a garnishee order.
Minimise Unfair Dismissal Claims with our Disciplinary eBook
Disciplinary action covers counselling, warnings and termination of employment. A disciplinary procedure provides a framework for dealing with instances where employees are alleged not to have met the required standards of conduct. The aim is to ensure prompt, consistent and fair treatment for all employees, and to assist in enabling both the employee and the business to be clear about the expectations of both parties. Use this handbook to help you understand;
- what makes a dismissal unlawful;
- when and how you can lawfully dismiss and employee;
- how your policies and procedures can help you to manage dismissal in your workplace;
- the alternatives to dismissal; and
- your notice and termination pay requirements