Final pay – what should be included?

December 7, 2011
Final pay is what the employer owes and must pay an employee, when the employer ends their employment.

 

What’s included in final pay?
 
Employees should get the following entitlements in their final pay:
  • outstanding wages, including penalty rates and allowances
  • accrued annual leave and annual leave loading entitlements
  • accrued or pro-rata long-service leave (if applicable)
  • redundancy pay entitlements (if applicable).
Annual leave loading payable on termination
 
If an employee is entitled to annual leave and annual leave loading, then they must be paid out for both entitlements if their employment is terminated. This applies even if a clause in a modern award, agreement or contract expressly states that either entitlement is not payable.
This entitlement is based on the annual leave on termination provision in s.90 (2) of the Fair Work Act 2009 which provides that a terminated employee with a period of untaken annual leave must be paid what they would have been paid if they had taken that period of leave.  This section is part of the National Employment Standards so it cannot be excluded by any term in a modern award, agreement or other instrument that may provide for a lesser benefit.
 
When entitlements aren’t paid out
 
If an employee believes they haven’t been paid out for all of their entitlements in their final pay, they should contact the Union.

 

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