The Fair Work
Ombudsman has recently obtained advice from the Australian Government Solicitor
on the interpretation of the accrued leave provisions in the Fair Work Act 2009
(CTH) as they apply to national system employers.
This advice has led
to the Fair Work Ombudsman adopting the stance that where leave loading is
applicable, leave loading is also applicable to accrued leave entitlements to
be paid on termination of an employee.
This will be the case
even where a Modern Award states that leave loading is not payable on
Previously, there was
uncertainty around this matter and the Ombudsman has acknowledged that this
interpretation may be at odds with the advice that was previously being
provided to employers.
The “Final Pay” fact
sheet on the Fair Work Ombudsman’s website has now been updated to reflect
We recommend that
employers review their obligations to pay leave loading and ensure that
policies and procedures are updated so that termination pays are compliant with
the current interpretation.
Further, we recommend
that any employer who has previously made a termination payment on the
understanding that leave loading was not applicable, should seek legal advice
as to their obligations.