Change to Annual Leave Payments Upon Termination

The recent decision of Centennial Northern Mining Services Pty Ltd -v- CFMEU & Fair Work Commission in the Federal Court has considered the issue of whether annual leave loading is payable on termination where there is accrued but as yet untaken annual leave.

Prior to this decision, it was well understood that annual leave loading is not payable on termination, and this is provided for in the Fair Work Act. But a recent decision of Justice Buchanan, held that employees are entitled to receive payment of leave loading on accrued but untaken annual leave paid upon termination of their employment, as long as they had an entitlement whilst they were working for the employer.

This new decision requires that all employers, where leave loading is awarded, are ensuring that they are paying out leave loading where required.

If you have questions regarding your obligations to employees under the Fair Work Act, please contact Adam Foster or Chris Morey on (03) 9629 9629.