Changes to termination of employment rules in Modern Awards

Pursuant to a decision issued as part of the 4-yearly Review of Modern Awards, the Fair Work Commission (FWC) has varied the requirements relating to the termination of employment in a number of modern awards.

Specifically, the FWC has decided from 1 November 2018, a new model term will be included in 89 modern awards (list of modern awards available here). In summary, the new model term will include the following provisions:

  • employers must pay employees their outstanding wages and any other accrued entitlements under the relevant award and the National Employment Standards (NES) no later than 7 days after the day on which employment terminates; and
  • the FWC may make an order delaying the requirement for employers to pay employees’ wages if for example, an employer makes an application under section 120 of the Fair Work Act 2009 (for the FWC to reduce the amount of redundancy pay an employee is entitled to under the NES).

Employers should also be aware that, following the amendments, even where a deduction is made in accordance with the relevant modern award, employers are still unable to deduct wages from employees under 18 years of age if their parents or guardians have not agreed in writing. As with breaches of other award provisions, failure to comply with any of these new requirements may lead to the imposition of civil penalties (up to $12,600 for an individual and $63,000 for a corporation) and the payment of compensation under the Fair Work Act.

If you require further information or advice in relation to how these changes will affect your business, please do not hesitate to contact our Workplace Relations team.

This article was written by Barney Adams – Associate, Workplace Relations and Stella Gehrckens, Law Graduate.