Employment Law Update
Is annual leave loading paid on termination?
In Centennial Northern Mining Services Pty Ltd v CFMEU (No 2), the Federal Court held that annual leave owed to workers whose employment ends has to be paid out at the same rate they would have received had they taken it while still at work.
In particular, the judge found that the relevant section of the Fair Work Act 2009 (Cth) (section 90(2)) was “…not confined to a statement of a minimum obligation, but is a statement to the effect that an employee should not suffer a reduction in the value of unpaid annual leave if employment comes to an end while paid annual leave remains untaken“.
The decision clarifies that the National Employment Standards require payment of annual leave loading on termination of employment, where a loading would have been paid if leave was actually taken by an employee.
Employers should ensure that this decision is taken into account in effecting the termination of employment of employees who have an entitlement to annual leave loading.
For further information, please contact:
Seamus Burke | Partner
P: +61 2 4926 1733
This document contains information only and should not be relied upon by anyone as constituting legal advice