In our 7 November 2018 edition of Workplace Directions, we summarised the decision of the Full Bench of the Fair Work Commission to expand the right to request flexible work arrangements through the insertion of a model term into all modern awards.

In two further decisions resulting from its 4 yearly review of modern awards, the Full Bench has inserted changes to payment of wages and other entitlements (such as annual leave on termination of employment) and the deduction of wages from termination payments for failure to give notice.

What are the new obligations on employers when paying wages on termination of employment?

The new term titled ‘Payment of wages on termination of employment’ requires employers to pay:

• an employee’s wages no later than seven days after the their employment terminates; and
• all other amounts due under the applicable modern award and the National Employment Standards (NES) such as annual leave.

Which modern awards now include the model term?

The new term has been inserted into modern awards which previously did not make any provision regarding the time period within which termination payments were to be made. The Fair Work Commission has published a full list of modern awards which have been amended to insert the payment on termination of employment term.

Deducting wages and entitlements from employees who do not give notice on termination of employment

In addition to the payment on termination clause, the Full Bench has also modified the notice of termination clauses in modern awards. These changes are in respect of withholding wages when an employee does not give the required amount of notice on termination of employment. The termination clause:

• limits an employer to deducting one week’s wage from an employee who is over 18 years of age
• does not allow any deduction of wages from an employee who is under 18 years of age.

The above changes took effect from, and apply to payments on termination as of 1 November 2018.