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Clements Dunne and Bell Chartered Accountants | Termination Pays & Leave Loading - Are you getting it right?

Clements Dunne & Bell Melbourne

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Termination Pays & Leave Loading - Are you getting it right?

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 termination.

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 this interpretation. 

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.


 

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