[2020] FWCFB 5534
FAIR WORK COMMISSION

DECISION

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 GOSTENCNIK
DEPUTY PRESIDENT CLANCY
COMMISSIONER LEE
COMMISSIONER HUNT

MELBOURNE, 20 OCTOBER 2020

4 yearly review of modern awards – common issue – payment of wages on termination of employment – Timber Industry Award 2010

1. Background

[1] The ‘payment of wages’ terms in modern awards are being dealt with as a common issue in the 4 yearly review of modern awards. 

[2] In a decision issued on 17 July 2018 we finalised the payment of wages on termination of employment model term.1 In a further decision issued on 6 October 2020 2 (the 6 October 2020 decision) we dealt with four modern awards that contained outstanding award specific issues in relation to their payment of wages terms. One of these was the Timber Industry Award 2010 (the Timber Award).

[3] In the 6 October 2020 decision we noted that Ai Group had advised of an agreement with the CFMMEU, AMWU and ABI that the Timber Award be varied by deleting clause 25.3 and inserting the following term:

25.3 Payment on termination of employment

(a) If the employment of an employee terminates, the employer must pay the employee the following amounts in accordance with this clause:

(i) the employee’s wages under this award for any complete or incomplete pay period up to the end of the day of termination; and

(ii) all other amounts that are payable to the employee under this award and the NES.

(b) Where notice of termination is given by an employer or employee in accordance with the terms of this award or the NES the amounts described at clause 25.3(a) must be paid to the employee within 30 minutes of the employee ceasing work where the employee is paid by cash or cheque; or on the day of termination where the employee is paid by electronic funds transfer (EFT).

(c) In all other circumstances, the amounts described at clause 25.3(a)(i) and (ii) must be:

(i) paid to the employee on the day of termination; or

(ii) transferred to the employee’s account by no later than 7 days after the day on which the employee’s employment terminates, if the employee is ordinarily paid by EFT; or

(iii) sent to the employee by registered post by no later than 7 days after the day on which the employee’s employment terminated if the employee is ordinarily paid by cash or cheque.

(d) The requirement to pay wages and other amounts under clauses 25.3 (a), (b) and (c) is subject to further order of the Commission and the employer making any deductions authorised by this award or the Act.

Note 1: Section 117(2) of the Act provides that an employer must not terminate an employee’s employment unless the employer has given the employee the required minimum period of notice or “has paid” to the employee payment instead of giving notice.

Note 2: Paragraph (d) allows the Commission to make an order delaying the requirement to make a payment under clause X. For example, the Commission could make an order delaying the requirement to pay redundancy pay if an employer makes an application under section 120 of the Act for the Commission to reduce the amount of redundancy pay an employee is entitled to under the NES.

Note 3: State and Territory long service leave laws or long service leave entitlements under s.113 of the Act, may require an employer to pay an employee for accrued long service leave on the day on which the employee’s employment terminates or shortly after.

[4] In the 6 October 2020 decision we expressed a provisional view that the substance of the agreed variation is consistent with the general propositions derived from our decision of 20 May 2020 3 (set out at [21] – [22] of the 6 October 2020 decision), but the form of the proposed variation was unnecessarily complex. Consequently, we expressed a provisional view that the existing clause 25.3 be deleted and replaced with the following terms:

25.3. Payment on termination of employment

(a) Upon termination of employment the employer must pay the employee at the prescribed time for payment:

(i) the employee’s wages under this award for any complete or incomplete pay period up to the end of the day of termination; and

(ii) all other amounts that are due to the employee under this award and the NES.

(b) For the purpose of clause 25.3(a) the prescribed time for payment is given by the following table:

How the employee’s employment is terminated

Method of payment

Prescribed time for payment

By the employer giving notice or payment instead of notice, or by the employee giving the required minimum period of notice under clause 14.2.

If paid by cash or cheque

No later than 30 minutes after the employee finishes work on the day of termination of the employment

If paid by electronic funds transfer

On the day of termination of the employment

By the employer or employee other than as above

If paid by cash or cheque

Sent by registered post no later than 7 days after the day of termination of the employment

If paid by electronic funds transfer

No later than 7 days after the day of termination of the employment

 

(c) The requirement to pay wages and other amounts under clause 25.3(a) is subject to further order of the Commission and the employer making deductions authorised by this award or the Act.

NOTE 1: Section 117(2) of the Act provides that an employer must not terminate an employee’s employment unless the employer has given the employee the required minimum period of notice or “has paid” to the employee payment instead of giving notice.

NOTE 2: Clause 25.3(c) allows the Commission to make an order delaying the requirement to make a payment under clause 25.3. For example, the Commission could make an order delaying the requirement to pay redundancy pay if an employer makes an application under section 120 of the Act for the Commission to reduce the amount of redundancy pay an employee is entitled to under the NES.

NOTE 3: State and Territory long service leave laws or long service leave entitlements under s.113 of the Act, may require an employer to pay an employee for accrued long service leave on the day on which the employee’s employment terminates or shortly after.

[5] Interested parties were invited to comment on our provisional view by no later than 4pm on Thursday 15 October 2020. We stated that if no submissions were received opposing our provisional view we would issue a final variation determination in the terms set out above.

[6] We received a submission from the CFMMEU indicating support for our provisional view. No submissions were received opposing our provisional view. Accordingly we will issue a final variation determination in the terms set out above.

[7] We are satisfied that the variation proposed is necessary to ensure that the Timber Award achieves the modern awards objective. In reaching that conclusion we have had regard to the considerations in s.134(1)(a)-(h) insofar as they are relevant.

[8] A variation determination will be published with this decision.

PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR723624>

1  [2018] FWCFB 3566.

 2   [2020] FWCFB 5275

 3   [2020] FWCFB 131.