[2016] FWCFB 7455
FAIR WORK COMMISSION

STATEMENT


Fair Work Act 2009

s.156 - 4 yearly review of modern awards

4 yearly review of modern awards—Payment of wages
(AM2016/8)

JUSTICE ROSS, PRESIDENT
DEPUTY PRESIDENT BOOTH
DEPUTY PRESIDENT CLANCY
COMMISSIONER CRIBB
COMMISSIONER HUNT

MELBOURNE, 14 OCTOBER 2016

4 yearly review of modern awards – Payment of wages –Timing of payment on termination.

[1] A number of matters concerning various ‘payment of wages’ terms in certain modern awards have been referred to this Full Bench for determination. A summary of the various matters is set out in a Statement issued 6 July 2016 (the 6 July Statement).

[2] A further Statement with draft directions was issued on 2 August 2016 (the 2 August Statement). That statement provided interested parties with an opportunity to comment on the proposed directions. Final directions were issued on 15 August 2016.

[3] A Statement was issued on 8 September 2016 (the 8 September Statement) attaching draft determinations for 25 awards in relation to the timing of payment of wages on termination. The Statement also raised a number of issues for the consideration of the parties.

[4] This matter is listed for mention on 17 October 2016 and hearing on 21 October 2016.

[5] The purpose of this statement is to express a preliminary view about the payment of wages on termination.

Current award provisions

[6] Attachment A sets out awards that provide for payment of wages and other amounts owing on termination of employment and any timeframe for payment specified in the award. Some 86 modern awards make no provision for payment on termination (Attachment B).

[7] Of the 36 awards that provide a timeframe for payment on termination:

[8] We note the following features of some of the award provisions for payment of wages on termination:

The current claims

[9] Ai Group’s proposed draft determinations would add the following sentence to existing payment of wages clauses: “provided that, where such wages are paid by EFT, payment may be made in accordance with the usual pay cycle.” It is submitted that this change will reduce costs and regulatory burden presently borne by the employer because of the requirement to pay a potentially large sum within a short period and the need to administer an additional pay run.

[10] Ai Group submits that current award provisions:

[11] It is further submitted that the proposed variations:

[12] ABI and the NSW Business Chamber submit that the current award provisions in the 10 awards that form part of the claim are impractical and inconsistent with the modern awards objective 2. Their submission outlines five reasons for the proposed change:

Legislative scheme

[13] Section 323 of the Fair Work Act 2009 (FW Act) deals with both the frequency of payments to an employee for “amounts payable to the employee in relation to the performance of work” and the method for payment:

[14] In Casey Grammar School v Independent Education Union of Australia 3 the Commission observed that:

[15] While s.323 clearly requires an employer to pay wages and related amounts such as leave payments 5 not later than one month after they have accrued, it is not clear whether “amounts payable to the employee in relation to the performance of work” encompasses amounts accrued under an award or the NES upon termination such as payment in lieu of annual leave (FW Act s.90(2)) and redundancy pay (s.119(1)).6 There does not appear to be anything else in the FW Act that addresses the timing of termination payments generally. Consequently, if s.323 does not encompass all termination payments, there would seem to be a legislative gap.

[16] One provision of the FW Act that does deal expressly with the timing of a termination payment is s.117. Specifically, s.117(2)(b) appears to require, 7 where employment is terminated with payment in lieu of the statutory notice period, that the payment in lieu be made prior to or upon the termination of employment:

[17] How s.117(2)(b) sits with current award provisions in relation to payment on termination is unclear.

Provisional view and questions for the parties

[18] It seems to us that the issue of payment of wages and other amounts owing on termination of employment is a broader issue than previously appreciated. There is at least a doubt that the legislative scheme covers the payment of termination payments generally on termination. Accordingly, it is our provisional view that there is some utility in a common payment on termination provision across all 122 modern awards.

[19] It is our provisional view that each modern award should provide for the payment of wages and other amounts owing on termination of employment, to ensure that employers and employees are aware of their obligations and entitlements. It is proposed that the default term for payment of wages and other amounts due on termination of employment should be:

1. Payment on termination of employment

Unlike the ABI/AiGroup proposed variations, the provisional default term is not confined to the circumstances where an employee is paid by EFT. This is because our provisional view is that the draft determination proposed by ABI/AiGroup does not adequately address the concern that employers not be required to make termination payments within a very short timeframe. For example, if an employee’s employment was terminated the day before a normal payday, the employer would be required to make the payment the following day. We are also of the provisional view that there is merit in the proposition that the current award provisions do not reflect modern payroll practices.

[20] Further, our provisional view is that there does not appear to be a sound rationale for retaining the current provisions that require payment of wages on termination within a short period after termination (such as one or two days, or ‘forthwith’). Accordingly, we would propose to replace the existing provisions in respect of the timeframe for the payment of termination payments, in the 36 modern awards mentioned previously, with the provisional default term.

Question 1 – Parties are invited to comment on the terms of the provisional default term.

Question 2 – Parties are invited to comment on the provisionally expressed view that the default term be inserted into all modern awards.

Question 3–If any party would seek to retain a current award provision, the Full Bench requests that the party provide an explanation as to the purpose of the provision and how this particular provision meets the modern awards objective.

Question 4–Parties are asked to consider how s.117(2)(b) might interact with the proposed default term and whether the clause should include reference to s.117(2)(b).

Note: As observed above (at [16]), it appears that s.117(2)(b) requires payment in lieu of notice under the NES to be made prior to or upon termination of employment.

Next Steps

[21] The hearing in respect of all payment of wages matters is listed for 9:30 am on Friday, 21 October 2016 in Sydney. In addition to any other matter they may wish to raise, interested parties are asked to address the questions set out above during the course of their oral submissions on 21 October 2016.

PRESIDENT

Printed by authority of the Commonwealth Government Printer

<Price code C, PR586505>

 1   AiGroup submission 20 September 2016 pages 8-9

 2   ABI & NSWBC submission 20 September at 6

 3   [2010] FWA 8218

 4   Ibid at [9]. See further Murrihy v Betezy.com.au Pty Ltd [2013] FCA 908 at 142

 5   In relation to payment for leave, see Canavan Building Pty Ltd [2014] FWCFB 3202 at [44]

 6   See for example Garrick & Mines v Mitsubishi Motors Australia Ltd [2014] SAIRC 38

 7   See Melbourne Stadiums Ltd v Sautner [2015] FCAFC 20 per White J at [213]-[214]

 

 

Attachment A–Awards containing provision for payment on termination

Award

Method of payment

Provision for payment on termination

Timeframe for payment on termination

AGED CARE AWARD 2010 [MA000018]

Cash or EFT

Clause 17.3

When notice of termination of employment has been given by an employee or an employee’s services have been terminated by an employer, payment of all wages and other moneys owing to an employee will be made to the employee by no later than the last day of the formal notice period.

Aluminium Industry Award 2010 [MA000060]

Cash, cheque or EFT

Clause 17.3

On termination of employment, wages due to an employee must be paid on the day of termination or paid to the employee by the next regular pay day in accordance with clause 17.2.

Asphalt Industry Award 2010 [MA000054]

Cash, cheque or EFT

Clause 19.3

On termination of employment the wages due to an employee must be paid on the day of termination or be forwarded to the employee within 2 business days after termination.

Black Coal Mining Industry Award 2010 [MA000001]

Cheque or EFT

Clause 16.7

Upon termination of employment, wages due to an employee will be paid on the day of such termination or forwarded by post, within 72 hours, to the last address notified in writing by the employee.

Note also cl. 13.5 which sets out payments on termination

Building and Construction General On-site Award 2010 [MA000020]

Cash, cheque, bank cheque or EFT

Clause 31.4

When notice is given, all monies due to the employee must be paid at the time of termination of employment. Where this is not practicable, the employer will have two working days to send monies due to the employee by registered post (or where paid by EFT the monies are transferred into the employee’s account).

Business Equipment Award 2010 [MA000021]

Cash, cheque or EFT

Clause 25.4

Upon termination of employment, the wages due to an employee must be paid on the day of such termination or forwarded by post on the next working day.

Children’s Services Award 2010 [MA000120]

Cash, cheque or EFT

Clause 19.3

Where an employee lawfully leaves their employment they will be paid all moneys due at the time of leaving by cash, cheque or electronic funds transfer. Alternatively, the employee may be paid on the next working day where this is reasonable.

Dry Cleaning and Laundry Industry Award 2010 [MA000096]

Cash or EFT

Clause 19.3

When notice of termination of employment has been given by an employee or an employee’s services have been terminated by an employer, payment of all wages and other money owing to an employee will be made to the employee by no later than the last day of the formal notice period.

Electrical, Electronic and Communications Contracting Award 2010 [MA000025]

Cash, cheque or EFT

Clause 22.3

(a) On termination of employment, wages due to an employee must be paid on the day of termination or forwarded to the employee by post on the next working day.

(b) Where an employee is paid under a rostered day off system and has accrued a credit towards a rostered day off such credit must be taken into account in calculating wages due on termination.

Food, Beverage and Tobacco Manufacturing Award 2010 [MA000073]

Cash, cheque or EFT

Clause 28.3

On termination of employment, wages due to an employee must be paid on the day of termination or forwarded to the employee on the next working day.

Graphic Arts, Printing and Publishing Award 2010 [MA000026]

Cash, cheque or EFT

Clause 28.5

On termination of employment, all monies due to an employee must be paid on the day of termination. When an employee is dismissed without notice all monies are to be forwarded to the employee by post or electronic funds transfer by the end of the next business day following the termination.

Horse and Greyhound Training Award 2010 [MA000008]

Cash, cheque or EFT

Clause 18.1

When an employee’s employment is terminated before the usual payday, the employee must be paid all wages and holiday pay to which the employee is entitled within 24 hours of leaving the employer’s service.

Horticulture Award 2010 [MA000028]

Cash, cheque or EFT

Clause 19.3

On termination of employment, wages due to an employee must be paid on the day of termination or forwarded to the employee by post on the next working day.

Manufacturing and Associated Industries and Occupations Award 2010 [MA000010]

Cash, cheque or EFT

Clause 34.3

On termination of employment, wages due to an employee must be paid on the day of termination or forwarded to the employee by post on the next working day.

Market and Social Research Award 2010 [MA000030]

EFT or by agreement cash or cheque

Clause 19.5

An employer must, on request, provide to an employee on termination a detailed statement of outstanding entitlements. The wages due to an employee must be paid on the day of such termination or forwarded via post on the next working day.

Meat Industry Award 2010 [MA000059]

“In manner agreed”

Clause 29.2

Upon termination of employment, any wages due to an employee will be paid on the day of such termination or, at the employee’s option, forwarded to them on the next working day.

Mobile Crane Hiring Award 2010 [MA000032]

Cash, cheque or EFT

Clause 19.5

Upon termination of employment, wages due will be paid on the day of such termination or forwarded by electronic transfer or post on the next working day.

Nursery Award 2010 [MA000033]

Cash, cheque or EFT

Clause 22.3

On termination of the employment, the wages due to an employee must be paid on the day of termination or be forwarded to the employee within 2 business days after termination.

Nurses Award 2010 [MA000034]

Cash, cheque or EFT

Clause 18.3

When notice of termination of employment has been given by an employee or an employee’s services have been terminated by the employer, payment of all wages and other monies owing to an employee will be made to the employee.

Passenger Vehicle Transportation Award 2010 [MA000063]

The employer at its discretion may pay an employee by electronic funds transfer to a bank account nominated by an employee

Clause 19.4

Notwithstanding anything contained in this clause, the employer must pay to an employee who leaves or is dismissed all moneys due to the employee within two working days.

Pastoral Award 2010 [MA000035]

Cash, cheque or EFT

Clause 16.3

On termination of employment, wages due to an employee must be paid on the day of termination or forwarded to the employee by post on the next working day.

Pharmaceutical Industry Award 2010 [MA000069]

Cash, cheque or EFT

Clause 21.3

On termination of employment the wages due to an employee must be paid on the day of such termination or be forwarded to them within 2 business days after termination.

Plumbing and Fire Sprinklers Award 2010 [MA000036

Cash, cheque, bank cheque or EFT

 

When notice is given in accordance with clause 17—Termination of employment, monies due to the employee must be paid at the time of termination. Where this is not practicable monies will be sent by registered post or, if the employee is normally paid by electronic funds transfer, transferred into the employee’s account within two working days

Note- penalty payment for waiting time (ordinary rates for 8 hours per day for up to a week)

Professional Diving Industry (Industrial) Award 2010 [MA000108]

Cash, cheque, bank cheque or EFT

Clause 19.4

On termination of employment, wages due to employees must be paid to them on the day of such termination or forwarded to them by post on the next working day.

Professional Diving Industry (Recreational) Award 2010 [MA000109]

Cash, cheque, bank cheque or EFT

Clause 18.4

On termination of employment, wages due to employees must be paid to them on the day of such termination or forwarded to them by post on the next working day.

Restaurant Industry Award 2010 [MA000119]CSH,

Cash, cheque or EFT

Clauses 27.4 and 27.5

27.4 When notice of termination of employment has been given by an employee or an employee’s services have been terminated by an employer, payment of all wages due must be made during working time, prior to the employee leaving their employment.

27.5 Where an employee is dismissed for misconduct the employee must be paid within one hour of their dismissal or as soon as practicable thereafter.

Road Transport (Long Distance Operations) Award 2010 [MA000039]

EFT at the employer’s discretion

Clause 18.3

Notwithstanding anything contained in this clause, the employer must pay to an employee who leaves or is dismissed all money due to the employee immediately

Road Transport and Distribution Award 2010 [MA000038]

EFT at employer’s discretion

Clause 20.3

Notwithstanding anything contained in this clause, the employer must pay to an employee who leaves or is dismissed all moneys due to the employee forthwith.

Seafood Processing Award 2010 [MA000068]

Cash, cheque or EFT

Clause 21.3

On the day of termination or forwarded within 48 hours.

Silviculture Award 2010 [MA000040]

Cash, cheque or EFT

Clause 21.3

When notice is given in accordance with the NES, all money due to the employee pursuant to this award must be paid at the time of termination. Where this is not practicable, the employer must, within two clear working days of the termination, transfer all money due by electronic funds transfer or by registered post to the employee’s home address.

Any time spent waiting beyond the two working days must be paid for at ordinary rates of eight hours per day for up to one week.

Storage Services and Wholesale Award 2010 [MA000084]

Cash or cheque during working hours or by EFT

Clause 20.3

On termination of employment, wages due to an employee must be paid on the day of termination or forwarded to the employee as soon as reasonably practicable and within two working days after the termination.

Supported Employment Services Award 2010 [MA000103]

Cash, cheque or EFT, as determined by employer.

Clause 18.4 and 18.5

18.4 Where an employee is discharged from employment the employee will be paid immediately for all wages, overtime, pro rata payment for annual leave, annual leave loading or any remuneration due. Payment may be made by cash, cheque or electronic funds transfer at the discretion of the employer.

18.5 Where an employee lawfully leaves their employment they will be paid all monies due at the time of leaving. Payment may be made by cash, cheque or electronic funds transfer at the discretion of the employer.

18.6 In the event of a delay of this payment, within the control of the employer, the employee to be paid ordinary time rates for ‘waiting time’. Time kept waiting will be deemed to operate after 6pm on the Friday of each pay week where payment made by EFT.

Timber Industry Award 2010 [MA000071]

Cash, cheque or EFT

Clause 25.3

25.3(a) Upon termination after the prescribed period of notice, or where the notice period has been dispensed with in accordance with clause 15 (Redundancy) all monies must be paid at the usual place of payment within 15 minutes of the ceasing time on the day of the termination of employment. If the usual place is at work in the bush, within 30 minutes of the usual ceasing time.

25.3(b) - If the employment is otherwise terminated, no later than the expiration of the pay period.

Vehicle Manufacturing, Repair, Services and Retail Award 2010 [MA000089]

Cash or, with the agreement of the majority of workers in a workplace, by cheque or direct transfer.

An employer and an employee may agree to pay by cheque or direct transfer.

Clause 24.4

(a) Upon termination of the employment, the employer will pay wages due to an employee:

(i) on the day of such termination;

(ii) by forwarding such wages to the employee on the next working day; or

(iii) at the employer’s place of business on a stated day not later than seven days after such termination. If the employer requires the employee to visit such place of business to collect wages then, in addition to the amount of moneys due, the employer will pay the employee an additional four hours’ ordinary pay.

Except that where an employee abandons his or her employment or the employee’s employment is terminated without notice for serious and wilful misconduct the employer will pay the wages due to the employee within two business days (not including a Saturday, Sunday or public holiday) of the termination.

(b) An employer may deduct from monies due to an employee such amount as is authorised in writing by the employee for a lawful purpose specified in the authority.

Waste Management Award 2010 [MA000043]

At the employer’s discretion, by EFT.

Clause 24.3

Despite anything contained in this clause, the employer must pay to an employee who leaves or is dismissed all money due to the employee as soon as possible.

Wine Industry Award 2010

Cash or EFT

Clause 26.3

On termination of the employment, wages due to an employee must be paid on the day of such termination or be forwarded to the employee on the next working day.

Attachment B–Awards with no provision for payment on termination

Aboriginal Community Controlled Health Services Award 2010 [MA000115]
Air Pilots Award 2010 [MA000046]
Aircraft Cabin Crew Award 2010 [MA000047]
Airline Operations—Ground Staff Award 2010 [MA000048]
Airport Employees Award 2010 [MA000049]
Alpine Resorts Award 2010 [MA000092]
Ambulance and Patient Transport Industry Award 2010 [MA000098]
Amusement, Events and Recreation Award 2010 [MA000080]
Animal Care and Veterinary Services Award 2010 [MA000118]
Aquaculture Industry Award 2010 [MA000114]
Architects Award 2010 [MA000079]
Banking, Finance and Insurance Award 2010 [MA000019]
Book Industry Award 2010 [MA000078]
Broadcasting and Recorded Entertainment Award 2010 [MA000091]
Car Parking Award 2010 [MA000095]
Cement and Lime Award 2010 [MA000055]
Cemetery Industry Award 2010 [MA000070]
Cleaning Services Award 2010 [MA000022]
Clerks—Private Sector Award 2010 [MA000002]
Coal Export Terminals Award 2010 [MA000045]
Commercial Sales Award 2010 [MA000083]
Concrete Products Award 2010 [MA000056]
Contract Call Centres Award 2010 [MA000023]
Corrections and Detention (Private Sector) Award 2010 [MA000110]
Cotton Ginning Award 2010 [MA000024]
Dredging Industry Award 2010 [MA000085]
Educational Services (Post-Secondary Education) Award 2010 [MA000075]
Educational Services (Schools) General Staff Award 2010 [MA000076]
Educational Services (Teachers) Award 2010 [MA000077]
Electrical Power Industry Award 2010 [MA000088]
Fast Food Industry Award 2010 [MA000003]
Fire Fighting Industry Award 2010 [MA000111]
Fitness Industry Award 2010 [MA000094]
Funeral Industry Award 2010 [MA000105]
Gardening and Landscaping Services Award 2010 [MA000101]
Gas Industry Award 2010 [MA000061]
General Retail Industry Award 2010 [MA000004]
Hair and Beauty Industry Award 2010 [MA000005]
Health Professionals and Support Services Award 2010 [MA000027]
Higher Education Industry—Academic Staff—Award 2010 [MA000006]
Higher Education Industry—General Staff—Award 2010 [MA000007]
Hospitality Industry (General) Award 2010 [MA000009]
Hydrocarbons Field Geologists Award 2010 [MA000064]
Hydrocarbons Industry (Upstream) Award 2010 [MA000062]
Joinery and Building Trades Award 2010 [MA000029]
Journalists Published Media Award 2010 [MA000067]
Labour Market Assistance Industry Award 2010 [MA000099]
Legal Services Award 2010 [MA000116]C
Live Performance Award 2010 [MA000081]
Local Government Industry Award 2010 [MA000112]
Mannequins and Models Award 2010 [MA000117] Clause 17
Marine Tourism and Charter Vessels Award 2010 [MA000093]
Marine Towage Award 2010 [MA000050]
Maritime Offshore Oil and Gas Award 2010 [MA000086]
Medical Practitioners Award 2010 [MA000031]
Mining Industry Award 2010 [MA000011]
Miscellaneous Award 2010 [MA000104]
Oil Refining and Manufacturing Award 2010 [MA000072]
Pest Control Industry Award 2010 [MA000097]
Pharmacy Industry Award 2010 [MA000012]
Port Authorities Award 2010 [MA000051]
Ports, Harbours and Enclosed Water Vessels Award 2010 [MA000052]
Poultry Processing Award 2010 [MA000074]
Premixed Concrete Award 2010 [MA000057]
Professional Employees Award 2010 [MA000065]
Quarrying Award 2010 [MA000037]
Racing Clubs Events Award 2010 [MA000013]
Racing Industry Ground Maintenance Award 2010 [MA000014]
Rail Industry Award 2010 [MA000015]
Real Estate Industry Award 2010 [MA000106]
Registered and Licensed Clubs Award 2010 [MA000058]
Salt Industry Award 2010 [MA000107]
Seagoing Industry Award 2010 [MA000122]
Security Services Industry Award 2010 [MA000016]
Social, Community, Home Care and Disability Services Industry Award 2010 [MA000100]
Sporting Organisations Award 2010 [MA000082]
State Government Agencies Award 2010 [MA000121]
Stevedoring Industry Award 2010 [MA000053]
Sugar Industry Award 2010 [MA000087]
Surveying Award 2010 [MA000066]
Telecommunications Services Award 2010 [MA000041]
Textile, Clothing, Footwear and Associated Industries Award 2010 [MA000017]
Transport (Cash in Transit) Award 2010 [MA000042]
Travelling Shows Award 2010 [MA000102]
Water Industry Award 2010 [MA000113]
Wool Storage, Sampling and Testing Award 2010 [MA000044]