1
[2016] FWCFB 8463
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, 1 DECEMBER 2016
4 yearly review of modern awards – Payment of wages.
1. Background
[1] Section 156 of the Fair Work Act 2009 (Cth) (FW Act) provides that the Commission
must conduct a 4 yearly review of modern awards as soon as practicable after 1 January 2014
(the Review). Subsection 156(2) deals with what must be done in the Review and provides
that the Commission must review all modern awards and may, among other things, make
determinations varying modern awards. Each modern award must be reviewed in its own
right, but this does not prevent the Commission from reviewing two or more modern awards
at the same time (s.156(5)).
[2] In conducting the Review the Commission is able to exercise its usual procedural
powers, contained in Division 3 of Part 5-1 of the FW Act. Importantly, the Commission is
not bound by the rules of evidence and procedure (s.591) and may inform itself in relation to
any matter before it in such manner as it considers appropriate (s.590(1)).
[3] The Review is to be distinguished from inter partes proceedings. Section 156 imposes
an obligation on the Commission to review all modern awards and, as we have mentioned,
each modern award must be reviewed in its own right. The Review is conducted on the
Commission’s own motion and is not dependent upon an application by an interested party.
Nor is the Commission constrained by the terms of a particular application.1 The Commission
is not required to make a decision in the terms applied for2 and, in a Review, may vary a
modern award in whatever terms it considers appropriate, subject to its obligation to accord
interested parties procedural fairness and the application of relevant statutory provisions, such
as ss.134, 138 and 578.
[4] The scope of the Review was considered in the 4 Yearly Review of Modern Awards:
Preliminary Jurisdictional Issues Decision.3 We adopt and apply that decision and in
particular the following propositions:
DECISION
E AUSTRALIA FairWork Commission
[2016] FWCFB 8463
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(i) The Review is broader in scope than the Transitional Review of modern awards
completed in 2013.
(ii) In conducting the Review the Commission will have regard to the historical
context applicable to each modern award.
(iii) The Commission will proceed on the basis that prima facie the modern award
being reviewed achieved the modern awards objective at the time it was made.
(iv) Variations to modern awards should be founded on merit based arguments. The
extent of the argument and material required will depend on the circumstances.
[5] A number of matters concerning various ‘payment of wages’ terms in modern awards
have been referred to this Full Bench for determination. A summary of the various matters is
set out in a Statement4 issued on 6 July 2016. Conciliation conferences were held on 27 July
2016. A further Statement5 was issued on 2 August 2016. That Statement provided interested
parties with an opportunity to comment on the proposed directions. Final directions were
attached to a Statement6 issued on 15 August 2016. A list of the submissions made pursuant
to those directions is set out at Attachment A.
[6] A Statement7 was issued on 8 September 2016 attaching draft determinations for 25
modern awards in respect of which there was no specific claim. The awards in question
provide a timeframe for the payment of termination payments and the draft determinations
propose the variation of those provisions, in a manner consistent with the employer claims in
relation to 10 other awards.
[7] In a Statement8 issued on 14 October 2016 we expressed some provisional views
about the payment of wages on termination.
2. The Issues
2.1 Timing of payment of wages
[8] The Shop, Distributive and Allied Employees Association (SDA) application9 seeks to
vary three modern awards to require that all wages be paid on a regular pay day within four
days of the end of the pay period. The three awards are:
Fast Food Industry Award 2010;
General Retail Industry Award 2010; and
Hair and Beauty Industry Award 2010.
[9] These awards do not currently specify a pay day or a period after the completion of the
pay-cycle within which an employee will receive their pay.
[10] The SDA, Australian Business Industrial and the NSW Business Chamber (jointly
ABI) and Ai Group have reached an agreed position in respect of the variation of the three
awards which are the subject of the SDA application.
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/2016fwcfb7455.pdf
https://www.fwc.gov.au/documents/decisionssigned/html/2016fwcfb6401.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2016fwcfb5741.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2016fwcfb5254.htm
https://www.fwc.gov.au/documents/decisionssigned/html/2016fwcfb4519.htm
[2016] FWCFB 8463
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[11] In relation to the General Retail Industry Award 2010, it is proposed that clause 23 be
varied to insert the words ‘within 7 days of the end of the pay period’ at the end of the first
sentence in the second paragraph, as follows:
‘23. Payment of wages
Wages will be paid weekly or fortnightly according to the actual hours worked each week or
fortnight, or may be averaged over a period of a fortnight.
All wages shall be paid on a regular pay day within 7 days of the end of the pay period. The
employer must notify the employee in writing as to which day is the pay day. Where for any
reason the employer wishes to change the pay day, then the employer shall provide at least 4
weeks' written notice to the employee of such change.
An enterprise which prior to the 1st January 2010, paid particular classifications of its
employees on a monthly pay cycle may continue to pay these particular classifications of
employees on a monthly pay cycle. However no employee classified at level 3 or below under
this award may be paid on a monthly pay cycle and must be paid either weekly or fortnightly.’
(emphasis added)
[12] The payment of wages clauses in the Fast Food Industry Award 2010 and the Hair
and Beauty Industry Award 2010 are in the same terms (see clauses 22 and 25 respectively):
‘Wages will be paid weekly or fortnightly according to the actual hours worked each week or
fortnight or may be averaged over a period of a fortnight.’
[13] It is proposed to add the following words to the payment of wages clauses in these two
awards:
‘All wages are to be paid on a regular pay day, within 7 days of the end of the pay period. The
employer must notify each employee of the regular pay day. The regular pay day may be
varied by the provision of 4 weeks' notice by the employer to the employee(s). If the regular
pay day falls on a public holiday the wages may instead be paid on the next day that is not a
Saturday, Sunday or public holiday.’
[14] The SDA, ABI and Ai Group jointly submit that the proposed variations are necessary
to ensure that these awards achieve the modern awards objective.
[15] The SDA’s application in respect of these three modern awards raises some broader
issues, including the fact that most modern awards do not provide that wages should be paid
within a specified period after the end of the pay period. The 11 modern awards listed below
include a term providing that payment must be made within a specified number of days:
[2016] FWCFB 8463
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Award Days after completion of pay period
within which payment must be made
Black Coal Mining Industry Award 2010 7
Broadcasting and Recorded Entertainment Award 2010 7
Electrical, Electronic and Communications Contracting Award 2010 2
Horse and Greyhound Training Award 2010 2
Labour Market Assistance Industry Award 2010 5
Market and Social Research Award 2010 14
Passenger Vehicle Transportation Award 2010 2
Road Transport (Long Distance Operations) Award 2010 2
Road Transport and Distribution Award 2010 4
Silviculture Award 2010 2
Waste Management Award 2010 3
[16] In addition to the 11 awards listed above, 17 modern awards provide for payment on
or before a particular day of the week. For example clause 21 of the Textile Clothing,
Footwear and Associated Industries Award 2010 provides:
‘Wages will be paid weekly and no later than Thursday of any particular week.’
[17] The awards in this category are as follows:
Award Timeframe for payment
Ambulance and Patient Transport Industry Award 2010 No later than Wednesday
Amusement, Events and Recreation Award 2010 No later than Thursday
Animal Care and Veterinary Sciences Award 2010 On a set day, preferably
at a set time
Aquaculture Industry Award 2010 No later than Thursday
Building and Construction General On-site Award 2010 No later than Thursday
Carparking Award 2010 No later than Friday
Cleaning Services Award 2010 No later than Thursday
Joinery and Building Trades Award 2010 No later than Thursday
Mannequins and Models Award 2010 No later than Thursday
Marine Tourism and Charter Vessels Award 2010 No later than Thursday
Pharmaceutical Industry Award 2010 No later than Thursday
Plumbing and Fire Sprinklers Award 2010 No later than Thursday
Racing Industry Ground Maintenance Award 2010 No later than Thursday
unless otherwise agreed
Textile Clothing, Footwear and Associated Industries Award
2010
No later than Thursday
Transport (Cash in Transit) Award 2010 No later than Thursday
Travelling Shows Award 2010 No later than Thursday
Vehicle Manufacturing, Repair, Services and Retail Award 2010 No later than Thursday
[2016] FWCFB 8463
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[18] Three other modern awards allow for the payment of wages monthly or on a 4-week
cycle and provide for such wages to be paid half in advance and half in arrears.10
[19] For example, clause 23.1 of the Clerks – Private Sector Award 2010 provides:
‘Employees must be paid their wages weekly or fortnightly as determined by the employer or
monthly if mutually agreed. Where payment is made monthly it must be on the basis of two
weeks in advance and two weeks in arrears.’
[20] A further four modern awards11 make some provision for payment in arrears. For
example, clause 20.1(b) of the Air Pilots Award 2010 provides:
‘Wages must be paid weekly, fortnightly or monthly in arrears.’
[21] The effect of the provisions in the above seven awards is to specify the frequency of
payment and that payment is made ‘in arrears’, that is, after the work requiring payment has
been performed. These awards do not specify a period after the end of the pay period within
which wages are to be paid.
[22] A further 115 modern awards provide for the frequency by which the employers must
pay employees, as follows:
Weekly
1. Joinery and Building Trades Award 2010
2. Poultry Processing Award 2010
3. Textile, Clothing, Footwear and Associated Industries Award 2010
4. Road Transport (Long Distance Operations) Award 2010
5. Plumbing and Fire Sprinklers Award 2010 – doesn’t give a timeframe but says that payment
is to be made no later than Thursday each working week
6. Road Transport and Distribution Award 2010
7. Waste Management Award 201012
Fortnightly
1. Airport Employees Award 2010
2. Corrections and Detention (Private Sector) Award 2010
3. Fire Fighting Industry Award 2010
4. Higher Education Industry—General Staff—Award 2010
5. State Government Agencies Award 2010
Weekly or fortnightly
1. Aboriginal Community Controlled Health Services Award 2010
2. Aged Care Award 2010
3. Ambulance and Patient Transport Industry Award 2010
4. Amusement, Events and Recreation Award 2010
5. Aquaculture Industry Award 2010
6. Asphalt Industry Award 2010
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000038/default.htm
[2016] FWCFB 8463
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7. Car Parking Award 2010
8. Cement and Lime Award 2010
9. Cemetery Industry Award 2010
10. Cleaning Services Award 2010
11. Concrete Products Award 2010
12. Cotton Ginning Award 2010
13. Dredging Industry Award 2010
14. Dry Cleaning and Laundry Industry Award 2010
15. Electrical Power Industry Award 2010
16. Electrical, Electronic and Communications Contracting Award 2010
17. Fast Food Industry Award 2010
18. Funeral Industry Award 2010
19. Gardening and Landscaping Services Award 2010
20. Gas Industry Award 2010
21. General Retail Industry Award 2010
22. Hair and Beauty Industry Award 2010
23. Horse and Greyhound Training Award 2010
24. Horticulture Award 2010
25. Hospitality Industry (General) Award 2010 – or weekly by cash without consultation
26. Live Performance Award 2010
27. Mannequins and Models Award 2010
28. Marine Tourism and Charter Vessels Award 2010
29. Marine Towage Award 2010
30. Mobile Crane Hiring Award 2010
31. Passenger Vehicle Transportation Award 2010
32. Pastoral Award 2010
33. Pest Control Industry Award 2010
34. Pharmaceutical Industry Award 2010
35. Pharmacy Industry Award 2010
36. Ports, Harbours and Enclosed Water Vessels Award 2010
37. Premixed Concrete Award 2010
38. Quarrying Award 2010
39. Registered and Licensed Clubs Award 2010
40. Security Services Industry Award 2010
41. Silviculture Award 2010
42. Social, Community, Home Care and Disability Services Industry Award 2010
43. Storage Services and Wholesale Award 2010
44. Transport (Cash in Transit) Award 2010
45. Travelling Shows Award 2010
Weekly, fortnightly or monthly
1. Alpine Resorts Award 2010
2. Banking, Finance and Insurance Award 2010
3. Broadcasting and Recorded Entertainment Award 2010
4. Children’s Services Award 2010
5. Clerks—Private Sector Award 2010
6. Commercial Sales Award 2010
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7. Educational Services (Post-Secondary Education) Award 2010
8. Fitness Industry Award 2010
9. Health Professionals and Support Services Award 2010
10. Hydrocarbons Field Geologists Award 2010
11. Journalists Published Media Award 2010
12. Nursery Award 2010
13. Oil Refining and Manufacturing Award 2010
14. Racing Industry Ground Maintenance Award 2010
15. Real Estate Industry Award 2010
16. Restaurant Industry Award 2010
17. Sugar Industry Award 2010
18. Supported Employment Services Award 2010
19. Surveying Award 2010
20. Vehicle Manufacturing, Repair, Services and Retail Award 2010
21. Wool Storage, Sampling and Testing Award 2010
Other
Award Pay period
Air Pilots Award 2010 Weekly, fortnightly, monthly or otherwise as agreed
Aircraft Cabin Crew Award 2010 14 or 28 days or calendar month, in arrears or over such
other period as agreed
Airline Operations—Ground Staff Award
2010
Weekly or fortnightly in arrears or otherwise as agreed
Aluminium Industry Award 2010 Weekly, fortnightly, 3 weekly, 4 weekly, monthly
Animal Care and Veterinary Services
Award 2010
Associates must be paid at least monthly, on a set day
and preferably at a set time. All other employees must
be paid weekly, fortnightly or monthly
Black Coal Mining Industry Award 2010 Weekly unless otherwise agreed
Business Equipment Award 2010 Weekly, fortnightly, four-weekly, half-monthly,
monthly or in accordance with existing practices
Building and Construction General On-site
Award 2010
Weekly or less frequently in accordance with an award,
a transitional award or a Division 2B state award
Coal Export Terminals Award 2010 Not longer than fortnightly
Contract Call Centres Award 2010 Weekly or fortnightly or 4 weekly or monthly as agreed
between the employer and the majority of employees
and “Notwithstanding anything in this clause, if there is
an existing practice in place as at 31 December 2009
then an employer is permitted to continue with this
practice
Educational Services (Schools) General
Staff Award 2010
fortnightly, 4 weekly, monthly
[2016] FWCFB 8463
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Award Pay period
Educational Services (Teachers) Award
2010
fortnightly, 4 weekly, monthly
Food, Beverage and Tobacco
Manufacturing Award 2010
Weekly, fortnightly, 3 weekly, 4 weekly or monthly
Graphic Arts, Printing and Publishing
Award 2010
Weekly, fortnightly, 4 weekly or monthly
Higher Education Industry—Academic
Staff—Award 2010
fortnightly for academic staff, within 22 days of
submitting a valid claim for casuals
Hydrocarbons Industry (Upstream) Award
2010
Not longer than monthly)
Labour Market Assistance Industry Award
2010
Weekly, fortnightly, 4 weekly or monthly
Legal Services Award 2010 Fortnightly unless otherwise agreed
Local Government Industry Award 2010 Weekly, fortnightly or as otherwise agreed
Manufacturing and Associated Industries
and Occupations Award 2010
Weekly, fortnightly, 3 weekly, 4 weekly or monthly
Maritime Offshore Oil and Gas Award
2010
Not longer than monthly
Market and Social Research Award 2010 1, 2 or 4 weeks or a month
Meat Industry Award 2010 On a regular weekly basis or in a manner agreed
Mining Industry Award 2010 Not longer than monthly
Miscellaneous Award 2010 Dealt with in s.323
Nurses Award 2010 Fortnightly unless otherwise agreed, up to a maximum
of monthly
Port Authorities Award 2010 Weekly, fortnightly or as otherwise agreed
Professional Diving Industry (Industrial)
Award 2010
Weekly, fortnightly or as otherwise agreed
Professional Diving Industry
(Recreational) Award 2010
Weekly, fortnightly or as otherwise agreed
Salt Industry Award 2010 Not longer than monthly
Seafood Processing Award 2010 Weekly, fortnightly, three weekly, four weekly or
monthly
Seagoing Industry Award 2010 Not longer than monthly
Sporting Organisations Award 2010 Weekly or fortnightly, unless otherwise mutually
agreed, up to a monthly maximum period
[2016] FWCFB 8463
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Award Pay period
Telecommunications Services Award 2010 Weekly, fortnightly, four weekly or monthly or in
accordance with a practice in place as at 31 December
2009
Timber Industry Award 2010 Weekly, fortnightly, three weekly, four weekly or
monthly
Water Industry Award 2010 Weekly, fortnightly or as otherwise agreed
Wine Industry Award 2010 Weekly, fortnightly or alternative intervals by
agreement in writing.
[23] Just seven modern awards, as listed below, do not make any provision for frequency of
payment. Of these awards, only the Racing Clubs Events Award 2010 makes any provision
for payment of wages and this provision is limited to specifying methods of payment.
1. Architects Award 2010
2. Book Industry Award 2010
3. Medical Practitioners Award 2010
4. Professional Employees Award 2010
5. Racing Clubs Events Award 2010
6. Rail Industry Award 2010
7. Stevedoring Industry Award 2010
Consideration
[24] Before further discussing modern award ‘payment of wages’ provisions, it is
instructive to consider the extent of the statutory regulation. Section 323 of the 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:
323 Method and frequency of payment
(1) An employer must pay an employee amounts payable to the employee in relation to the
performance of work:
(a) in full (except as provided by section 324); and
(b) in money by one, or a combination, of the methods referred to in
subsection (2); and
(c) at least monthly.
Note 1: This subsection is a civil remedy provision (see Part 4-1).
Note 2: Amounts referred to in this subsection include the following if they become payable
during a relevant period:
(a) incentive-based payments and bonuses;
(b) loadings;
(c) monetary allowances;
(d) overtime or penalty rates;
(e) leave payments.
[2016] FWCFB 8463
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(2) The methods are as follows:
(a) cash;
(b) cheque, money order, postal order or similar order, payable to the employee;
(c) the use of an electronic funds transfer system to credit an account held by the
employee;
(d) a method authorised under a modern award or an enterprise agreement.
(3) Despite paragraph (1)(b), if a modern award or an enterprise agreement specifies a
particular method by which the money must be paid, then the employer must pay the money
by that method.
Note: This subsection is a civil remedy provision (see Part 4-1).
[25] In Casey Grammar School v Independent Education Union of Australia13 (Casey
Grammar School) the Commission observed that:
‘Section 323 is, as it[s] heading indicates, concerned with regulating the timing and frequency
of the payment of “amount[s] payable” to an employee, together with the method by which
those payments must be made. It does not create the underlying legal obligation to pay that
renders an amount as “an amount payable to an employee” within the meaning of s.324(1).
Rather, it operates on an existing legal obligation to pay and then imposes further obligations
on the employer in relation to the timing, frequency and method of such payments. The words
of s.323(1) are apt to cover all wage and wage-related amounts due from a national system
employer to one of its employees, irrespective of whether those amounts become legally
“payable” by virtue of the NES, an award, an individual or collective statutory agreement or a
common law contract.’14
[26] Section 323 deals with the method by which (e.g. cash, cheque or EFT) and frequency
with which (at least monthly) employers must pay employees amounts payable to them in
relation to the performance of work. The effect of s.323(1)(c) appears to be that such
amounts must be paid no later than one month after accrual.
[27] As noted in Casey Grammar School, s.323 operates on an existing obligation to pay by
imposing further obligations on the employer in relation to the time, frequency and method of
such payments. Section 323 does not specify when an amount ‘payable … in relation to the
performance of work’ becomes payable, or in other words, accrues.
[28] Section 323 only applies to ‘amounts payable to the employee in relation to the
performance of work’. The precise scope of this expression is unclear. While it is apt to
cover wages (including commission payments15) and wage related amounts such as leave
payments16, it is not clear whether it encompasses all termination payments. Regulation of
the timing of termination payments is discussed further in section 2.3 of this decision.
[29] In addition to the variations in the modern award ‘payment of wages’ provisions
referred to above, there are some further aspects of these provisions more generally that
require comment. First, the award provisions do not expressly deal with accrual of payments.
[2016] FWCFB 8463
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[30] Second, while most of the modern award provisions are headed ‘payment of wages’,
they adopt a range of different descriptions of the types of payments that they regulate. These
descriptions include:
‘wages’ in the General Retail Industry Award 2010;
‘all monies due to an employee by the employer in relation to the performance of
work’ in the Joinery and Building Trades Award 2010;
‘all earnings, including overtime’ in the Road Transport (Long Distance Operations)
Award 2010;
‘all wages, allowances and other monies’ in the Plumbing and Fire Sprinklers Award
2010;
‘all money payable under this award’ in the Airport Employees Award 2010; and
‘wages, allowances, penalty or overtime payments due to an employee’ in the
Corrections and Detention (Private Sector) Award 2010.
[31] Third, as appears from the proposed variations to the General Retail Industry Award
2010, Fast Food Industry Award 2010 and the Hair and Beauty Industry Award 2010 set out
at paragraphs [11] to [13] above, while most modern awards prescribe frequency of payments
(weekly, fortnightly etc), this is not understood to regulate the extent to which payments may
be made in arrears. It would seem that under these proposed variations, the maximum
permissible period between work being performed by an employee and wages being paid to
the employee for that work would be 14 days where wages are paid weekly and 21 days
where wages are paid fortnightly.
[32] It is not readily apparent that the differences between the various modern award
payment of wages provisions in terms of frequency of payment, pay days, payment in arrears,
the types of payments they are expressed to regulate and other differences in the wording of
provisions, in fact reflect different characteristics of the enterprises covered by the various
awards.
[33] It is our provisional view that all modern awards should include a term providing for
the method and frequency of payment as well as placing a limit on payment in arrears. We
also consider that there is utility in establishing a model ‘payment of wages and other
amounts’ award term.
[34] Our provisional ‘payment of wages and other amounts’ model term is as follows:
X. Payment of wages and other amounts
x.1 Pay periods and pay days
(a) The employer must pay each employee no later than 7 days after the end of
each pay period:
(i) the employee’s wages for the pay period; and
(ii) all other amounts that are due to the employee under this award and
the NES for the pay period.
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(b) An employee’s pay period may be:
(i) one week;
(ii) two weeks; or
(iii) subject to paragraph (e), one month.
(c) The employer must notify each employee in writing of their pay day and pay
period.
(d) Subject to paragraph (e), the employer may change an employee’s pay day
or pay period after giving 4 weeks’ notice in writing to the employee.
(e) An employer may only change from a one week or two week pay period to a
one month pay period by agreement with affected employees. If employees
in a particular classification were paid monthly prior to [insert date of
commencement of this clause], the employer may continue to pay employees
in that classification monthly without further agreement.
(f) Where an employee’s pay period is one month, two weeks must be paid in
advance and two weeks in arrears.
x.2 Method of payment
Payments under clause x.1(a) must be made by electronic funds transfer to
the account at a bank or financial institution nominated by the employee, or
by cash or cheque.
[35] Aspects of the provisional model term warranting further discussion include: the types
of payments it covers; accrual of payments under the award and the NES; how the term
provides for frequency of payment; restrictions on monthly pay; variation of pay days and pay
periods; whether provision needs to be made for pay days falling on weekends or public
holidays, and method of payment. These issues are discussed below.
[36] As noted at paragraph [30] above, while some of the existing award payment
provisions are confined to ‘wages’, many are expressed to include other amounts. The FW
Act does not define the term ‘wages’. The term ‘earnings’ is defined in s.332. Wages form
part of ‘earnings’ (s.332(1)(a)), but ‘payments the amount of which cannot be determined in
advance’ (s.332(2)(a)) do not. The note to s.332(2)(a) gives as examples of payments
excluded from ‘earnings’: ‘commissions, incentive-based payments and bonuses, and
overtime (unless the overtime is guaranteed)’. It consequently appears that ‘wages’ as used in
the FW Act is narrower than ‘remuneration’17 and is narrower than ‘amounts payable … in
relation to the performance of work’ in s.323(1).
[37] Modern awards commonly specify ‘minimum wages’ exclusively of other payment
entitlements such as allowances, penalties and overtime payments. However, it has not been
suggested that an award ‘payment of wages’ provision referring only ‘wages’ should be
understood as applying only to payments of base wages. Paragraph x.1(a) of the provisional
model term requires the payment made to an employee for each pay period to include wages
and ‘all other amounts that are due to the employee under this award and the NES for the pay
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period’. Such payment will include, for example, any base wages in respect of the pay period
and any allowances, penalties, overtime and paid leave payments that have accrued under the
award and the NES during the pay period.
[38] The wording of subparagraph x.1(a)(i) of the provisional model term is intended to
ensure that wage payments accrue under the award, or in other words fall due, by the end of
each pay period. As discussed later in this decision, absent a provision to this effect there
might be doubt as to when wages accrue under an award. In contrast, subparagraph x.1(a)(ii)
of the provisional model term requires payment of all other amounts that ‘are due’ under the
award and the NES for the pay period. This wording assumes that all amounts other than
wages provided for in the award or the NES and that should be paid to an employee in respect
of a pay period, accrue under the terms of the award or the NES in the pay period. Accrual of
payments under modern awards and the NES is discussed in section 2.4 of this decision.
[39] It is apparent from the proposed variations to the General Retail Industry Award 2010,
Fast Food Industry Award 2010 and the Hair and Beauty Industry Award 2010 discussed
earlier, that frequency of payment involves two issues. The first issue is the period in respect
of which an employee’s pay is to be calculated, or the ‘pay period’. The second issue is when
payment in respect of a pay period is to be made to the employee, or the ‘pay day’. The use
of ‘pay period’ in the provisional model term is consistent with its use in the FW Act, for
example in s.49(6):
A modern award, or a determination revoking a modern award, does not take effect in relation
to a particular employee until the start of the employee’s first full pay period that starts on or
after the day the award or determination comes into operation.18
[40] Paragraph x.1(b) of the provisional model term permits the length of an employee’s
pay period to be one week, two weeks or, subject to paragraph (e), one month. The effect of
paragraph (e) is that where employees in a particular classification are already paid on a one
month pay period then this can continue, but a new monthly pay arrangement can only be
introduced by agreement with affected employees.
[41] Pursuant to paragraph x.1(f) of the provisional model term, where the length of an
employee’s pay period is one month, two weeks of the pay period must be paid in advance.
This is to be understood as requiring payment of two weeks in advance as on the employee’s
pay day. The intention is to limit payment in arrears to ensure compliance with s.323(1)(c).
We note that paragraph x.1(f) of the provisional model term is consistent with clause 23.1 of
the Clerks – Private Sector Award 2010.
[42] Under the General Retail Industry Award 2010 and the Fast Food Industry Award
2010 and the Hair and Beauty Industry Award 2010 as proposed to be varied, an employer
may change a regular pay day after four weeks’ notice. Under the General Retail Industry
Award 2010, but not the variations proposed to the other two awards, such notice must be
given in writing. It may have been intended that variation of a pay day under these award
terms encompass variation of the length of pay periods. Paragraph x.1(d) of the provisional
model term makes it clear that an employer can change both an employee’s regular pay day
and the employee’s pay period after giving four weeks’ written notice to the employee.
[43] Under the variations proposed to the Fast Food Industry Award 2010 and the Hair and
Beauty Industry Award 2010 but not under the General Retail Industry Award 2010, ‘[i]f the
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regular pay day falls on a public holiday the wages may instead be paid on the next day that is
not a Saturday, Sunday or public holiday’. Similar provision is made in a number of other
awards.19
[44] Section 36(2) of the Acts Interpretation Act 1901 (Cth) (AI Act) provides that where
an Act requires a thing to be done on a Saturday, Sunday or public holiday, the thing may be
done on the next day that is not a Saturday, Sunday or public holiday. Pursuant to s.46(1)(a)
of the AI Act, s.36(2) applies to a modern award as if it were an Act. Interested parties are
asked to consider whether it would be desirable for the model term to include provision to
same effect as AI Act s.36(2), or alternatively, to include a note drawing attention to the
statutory provision.
[45] Subsection x.2 of the provisional model term provides clarity in relation to permissible
methods of payment, by requiring payments to be made by EFT, cash or cheque. As
reproduced earlier, FW Act s.323(2) specifies methods by which payments may be made to
employees ‘in relation to the performance of work’, subject to express award provision
(s.323(3)). Twelve modern awards do not currently specify any method of payment. These
12 awards include the General Retail Industry Award 2010, Fast Food Industry Award 2010
and Hair and Beauty Industry Award 2010.
[46] As discussed above, it is not apparent that the significant variations in existing modern
award ‘payment of wages’ terms are justified. The modern awards objective includes ‘the
need to ensure a simple, easy to understand, stable and sustainable modern award system’.
Providing clarity to employees about when and for what period they will be paid and
providing clarity to employers as to their obligations to make such payments, is consistent
with this objective.
[47] Our provisional view is that there would be benefit in either replacing the existing
provision for payment in all modern awards with the model term (once finalised), or
alternatively with a version of the model term appropriately adapted to the existing award
payment arrangements. Following are two examples of how the provisional model term
might possibly be adapted to existing arrangements.
Existing award term Possible adaption of provisional model term
General Retail Industry Award 2010
23. Payment of wages
Wages will be paid weekly or fortnightly
according to the actual hours worked each
week or fortnight, or may be averaged over a
period of a fortnight.
All wages shall be paid on a regular pay day.
The employer must notify the employee in
writing as to which day is the pay day.
Where for any reason the employer wishes to
change the pay day, then the employer shall
provide at least 4 weeks’ written notice to
the employee of such change.
An enterprise which prior to the 1st January
2010, paid particular classifications of its
23. Payment of wages and other amounts
23.1 Pay periods and pay days
(a) The employer must pay each employee
no later than 7 days after the end of each pay
period:
(i) the employee’s wages for the pay
period; and
(ii) all other amounts that are due to the
employee under this award and the
NES for the pay period.
(b) Payments may be calculated
according to the hours worked by the
employee each week, or the average hours
worked over two weeks.
[2016] FWCFB 8463
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employees on a monthly pay cycle may
continue to pay these particular
classifications of employees on a monthly
pay cycle. However no employee classified
at level 3 or below under this Award may be
paid on a monthly pay cycle and must be
paid either weekly or fortnightly.
(c) An employee’s pay period may be:
(i) one week; or
(ii) two weeks; or
(iii) subject to paragraph (f), one
month.
(d) The employer must notify each
employee in writing of their pay day and pay
period.
(e) Subject to paragraph (f), the employer
may change an employee’s pay day or pay
period after giving 4 weeks’ notice in
writing to the employee.
(f) An employer may not change from a one
week or two week pay period to a one month
pay period. If employees in a particular
classification at Level 4 or above were paid
monthly prior to 1 January 2010, the
employer may continue to pay employees in
that classification monthly. No employee
classified at Level 3 or below may be paid
monthly.
(g) Where an employee’s pay period is one
month, two weeks must be paid in advance
and two weeks in arrears.
23.2 Method of payment
Payments under clause 23.1(a) must be made
by electronic funds transfer to the account at
a bank or financial institution nominated by
the employee, or by cash or cheque.
Pharmaceutical Industry Award 2010
21. Payment of wages
21.1 Wages must be paid by cash, cheque or EFT
weekly (or fortnightly by agreement with the
majority of affected employees or an individual
employee), not later than Thursday in each pay
week, unless otherwise agreed with the majority
of employees. Provided that in any pay week in
which a public holiday falls on a Thursday or
Friday, wages accrued must be paid on the
previous Wednesday.
21.2 An employee paid by cash or cheque, must
be paid in the employer's time and if kept waiting
for their wages on pay day for more than 15
minutes after the usual time for ceasing work
must be paid at overtime rates after that 15
minutes until payment has been received.
21. Payment of wages and other amounts
21.1 Pay periods and pay days
(a) The employer must pay each employee
no later than 7 days after the end of each
pay period:
(i) the employee’s wages for the pay
period; and
(ii) all other amounts that are due to
the employee under this award and the
NES for the pay period.
(b) The pay day must be no later than
Thursday in each pay week unless
otherwise agreed with the majority of
employees. If Thursday or Friday in any
pay week is a public holiday, accrued
wages must be paid on the preceding
Wednesday.
(c) An employee’s pay period may be:
[2016] FWCFB 8463
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(i) one week; or
(ii) subject to paragraph (f), two
weeks.
(d) The employer must notify each
employee in writing of their pay day and
pay period.
(e) Subject to paragraph (f), the employer
may change an employee’s pay day or pay
period after giving 4 weeks’ notice in
writing to the employees.
(f) An employer may only change from a
one week pay period to a two week pay
period by agreement with a majority of
affected employees or with an employee
individually.
21.2 Method of payment and late payment
(a) Payments under clause 21.1(a) must be
made by electronic funds transfer to the
account at a bank or financial institution
nominated by the employee, or by cash or
cheque.
(b) An employee paid by cash or cheque
must be paid during working time and if
kept waiting for payment for more than 15
minutes after their usual time for finishing
work, must be paid at overtime rates after
that 15 minutes until payment is received.
[48] Parties are requested to make written submissions in relation to the provisional
‘payment of wages and other amounts’ model term, including its treatment of accrual of
payments as discussed further in section 2.4 of this decision. Submissions should be directed
to the concepts in and wording of the provisional model term.
[49] Submissions are also sought in respect of the provisional view that there would be
benefit in either replacing the existing provision for payment in all modern awards with the
model term (once finalised), or alternatively with a version of the model term appropriately
adapted to the existing award payment arrangements.
[50] Parties will be given the opportunity to raise award specific issues if and when draft
determinations are issued.
2.2 Removing a restriction on the days for payment of wages
[51] Restaurants and Catering Industrial (RCI) is seeking to vary the Restaurant Industry
Award 2010 to delete the current prohibition on the payment of wages on Fridays, Saturdays
and Sundays. The claim is opposed by United Voice. The RCI proposed that its claim be
dealt with in the Award Stage of the Review, rather than as part of these proceedings, on the
basis that ‘this particular claim [is] interrelated to the other claims [RCI] will be seeking at the
[2016] FWCFB 8463
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Award Stage … [and] is specific to a single award’.20 United Voice did not oppose that
course.
[52] In the 2 August 2016 Statement we agreed with the course proposed and accordingly
this claim will be referred to the Award Stage of the Review.
2.3 Timing of payment on termination of employment
[53] Some 36 modern awards contain terms which provide for the payment of wages and
other amounts owing to an employee on the termination of their employment. The relevant
terms of these modern awards are set out in Attachment B.
[54] Six of the 36 modern awards require payment on the day of termination, these are the:
Aged Care Award 2010
Dry Cleaning and Laundry Industry Award 2010
Restaurant Industry Award 2010
Road Transport (Long Distance Operations) Award 2010
Road Transport and Distribution Award 2010
Supported Employment Services Award 2010
[55] One award - the Aluminium Industry Award 2010 - contains an option of payment on
termination or in accordance with the employee’s normal pay cycle.
[56] Twenty-five of the 36 modern awards specify a period after termination within which
the termination payments must be made:
Award Days after termination within
which payment must be made
Asphalt Industry Award 2010 2
Black Coal Mining Industry Award 2010 3
Building and Construction General On-site Award 2010 2
Business Equipment Award 2010 1
Children’s Services Award 2010 1
Electrical, Electronic and Communications Contracting Award 2010 1
Food, Beverage and Tobacco Manufacturing Award 2010 1
Graphic Arts, Printing and Publishing Award 2010 1
Horse and Greyhound Training Award 2010 1
Horticulture Award 2010 1
Manufacturing and Associated Industries and Occupations Award 2010 1
Market and Social Research Award 2010 1
Meat Industry Award 2010 1
Mobile Crane Hiring Award 2010 1
Nursery Award 2010 2
Passenger Vehicle Transportation Award 2010 2
Pastoral Award 2010 1
Pharmaceutical Industry Award 2010 2
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Plumbing and Fire Sprinklers Award 2010 2
Professional Diving Industry (Industrial) Award 2010 1
Professional Diving Industry (Recreational) Award 2010 1
Seafood Processing Award 2010 2
Silviculture Award 2010 2
Storage Services and Wholesale Award 2010 2
Wine Industry Award 2010 1
[57] The remaining four of the 36 modern awards express timeframes in different ways:
the Nurses Award 2010 provides that when notice has been given, payment will
be made
the Timber Industry Award 2010 provides that:
‘where termination has been on notice or in accordance with the redundancy provisions of the
award, payment must be made within 15 minutes of the ceasing time on the day of termination
or within 30 minutes if the usual place of payment is at work in the bush. Where employment
is terminated otherwise, the employer must pay by no later than the expiration of the pay
period.’
the Vehicle Manufacturing Repair Services and Retail Award 2010 gives a
number of options for payment on termination which are as follows: on the day
of termination; forwarded on next business day; on a stated day not later than
7 days after termination (plus 4 hours pay for coming to collect wages) or within
2 business days in cases of abandonment, serious or wilful misconduct;
the Waste Management Award 2010- requires payment to be made ‘as soon as
possible’.
[58] As is evident from the table above, the time period within which termination payments
are to be made varies from the day of termination to three days after termination. In addition
to these variations, there are other features of some of these 36 modern awards which warrant
further examination:
(i) Ten awards provide for termination payments to be sent by post or registered
post. These awards are:
Black Coal Mining Industry Award 2010 (cl 16.7(a))
Building and Construction General On-Site Award 2010 (cl 31.4(a))
Electrical, Electronic and Communications Contracting Award 2010
(cl 22.3(a))
Market and Social Research Award 2010 (cl 19.5)
Mobile Crane Hiring Award 2010 (cl 19.5)
Pastoral Award 2010 (cl 16.3(a))
Plumbing and Fire Sprinklers Award 2010 (cl 27.4(a))
Professional Diving Industry (Industrial) Award 2010 (cl 19.4(a))
Professional Diving Industry (Recreational) Award 2010 (cl 18.4(a))
Silviculture Award 2010 (cl 21.3(a))
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The language used in these awards - ‘post’ or ‘registered post’ - is not
consistent and in some of these awards it is not clear if the terms only refer to
payment by cheque or whether it is envisaged that cash would be sent by post.
(ii) Six awards provide for termination payments to be ‘forwarded’ to the former
employee, but do not specify the means by which such payments are to be
provided. These awards are:
Asphalt Industry Award 2010 (cl 19.3)
Meat Industry Award 2010 (cl 29.2)
Nursery Award 2010 (cl 22.3)
Pharmaceutical Industry Award 2010 (cl 21.3(a))
Seafood Processing Award 2010 (cl 21.3(a))
Vehicle Manufacturing Repair Services and Retail Award 2010 (cl 24.4(a)(ii))
(iii) The Aged Care Award 2010 (cl 17.3) and the Dry Cleaning and Laundry
Industry Award 2010 (cl 19.3) both provide that termination monies are to be
paid by ‘no later than the last day of the formal notice period’. These
provisions may give rise to some uncertainty as the duration of the formal
notice period may not be known to the employee. It may be preferable to
specify a definite period for the payment of termination monies.
(iv) The Nurses Award 2010 (cl 18.3(a)) does not specify a time period within
which termination payments are to be made. Similarly, the Waste Management
Award 2010 (cl 24.3(a)) simply requires such payments to be paid ‘as soon as
possible’.
(v) The Children’s Services Award 2010 (cl 19.3(a)) provides two time periods for
the payment of termination monies – where the employee ‘lawfully leaves their
employment’ and otherwise. It is not clear what is meant by ‘lawfully leaves
their employment’ and nor is it clear why the timing of payment on
termination should depend on the reason for termination.
[59] It is apparent that there is considerable variation in the manner in which these
36 modern awards deal with payments on termination. In addition to the matters already
mentioned, the terms in these awards refer to the amounts owing to an employee in various
ways, including ‘all money due’21, ‘monies’22, ‘all wages and other monies’23 and ‘all wages
and holiday pay’24.
[60] Further, some of the existing terms do not cover all of the circumstances resulting in
termination of employment. For example, clause 31.4 of the Building and Construction
General On-Site Award 2010 provides:
‘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).’
[61] Clause 31.4 does not make provision for termination without notice, abandonment or
payment in lieu of notice.
[2016] FWCFB 8463
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[62] In addition to the lack of uniformity in the existing terms dealing with termination
payments, some 86 modern awards make no provision at all for the time period within which
termination payments are to be made.
[63] Ai Group and ABI are, together, seeking to vary 10 of the 36 modern awards which
deal with termination payments to enable employers who pay by electronic funds transfer
(EFT) to make termination payments in accordance with the normal pay cycle. The modern
awards sought to be varied are:
Business Equipment Award 2010;
Food, Beverage and Tobacco Manufacturing Award 2010;
Graphic Arts, Printing and Publishing Award 2010;
Horticulture Award 2010;
Manufacturing and Associated Industries and Occupations Award 2010;
Road Transport and Distribution Award 2010;
Road Transport (Long Distance) Award 2010;
Storage Services and Wholesalers Award 2010;
Supported Employment Services Award 2010; and
Wine Industry Award 2010.
[64] Ai Group submits that current award provisions:
are unfair to employers because they impose additional employment costs and
create a regulatory burden;
are irrelevant, having regard to modern payroll practices by virtue of which
employees are now primarily paid by EFT; and
are out of step with the vast majority of modern awards.
[65] 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’.
[66] 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. It is further submitted that the
proposed variations:
encourage flexibility and modern work practices; and
are necessary to ensure that the awards identified are achieving the modern
awards objective25.
[67] ABI submits that the current award provisions in the awards which are subject to the
claim are impractical and inconsistent with the modern awards objective26 and advances five
reasons for the proposed change:
the provisions apply to all terminations, including those that arise summarily;
[2016] FWCFB 8463
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employers can have difficulty promptly obtaining wage information necessary to
process payments;
employers sometimes need time to make funds available;
processing termination payments manually to comply with award provisions
imposes a time and administrative cost on employers; and
employers may incur additional financial costs when paying ‘out of cycle’ EFT
transactions for individual employees.
[68] The CFMEU (Mining and Energy Division) advances an alternate variation in respect
of the Black Coal Mining Industry Award 2010. The current clause 16.7 of that award
provides that upon termination of employment, wages due to an employee will be paid on the
day of termination or forwarded by post within 72 hours, to the last address notified by the
employee. The CFMEU proposed variation adds the following words to the existing term:
‘Provided that where payment is normally made by electronic funds transfer (EFT), the wages
due to an employee may be transferred into the employee’s account within 72 hours of the
termination of employment.’27
Consideration
[69] The issues associated with the payment of wages and other sums owing on termination
of employment are broader than the claims advanced by Ai Group and ABI. As we have
noted, there is considerable variation in the award terms dealing with this issue, for no
apparent reason. Further, some 86 modern awards make no provision for payments on
termination, in circumstances where there is some doubt as to whether the legislative scheme
makes provision for all of the types of payments which may be due to an employee on
termination of employment. We deal with the relevant legislative provisions shortly.
[70] These considerations led us to express some provisional views in respect of this issue,
in a Statement28 published on 14 October 2016. The provisional views may be summarised as
follows:
1. Each modern award should provide for the payment of wages and other amounts
owing to an employee on termination of employment, to ensure that employers and
employees are aware of their obligations and entitlements.
2. There is some utility in a common ‘payment on termination’ provision across all
122 modern awards.
3. The default term for the payment of wages and other amounts due on termination
of employment should be:
Payment on termination of employment
The employer must pay all amounts that are due to an employee under this award
and the NES when the employee’s employment ends:
(a) within 7 days after the employee’s last day of employment; or
(b) on the next normal pay day.
[2016] FWCFB 8463
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4. 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’) and the existing provisions in
respect of payments on termination should be replaced by the default term.
[71] Before turning to consider the submissions made in respect of these provisional views,
we propose to say something about the relevant statutory provisions.
[72] As discussed above, s.323 of the 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.
[73] As also noted above, s.323 only applies to ‘amounts payable to the employee in
relation to the performance of work’, and the precise scope of this expression is unclear.
Relevantly for present purposes, it is not clear whether it encompasses all amounts accrued
under an award or the NES upon termination, such as redundancy pay (s.119(1)).29 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 – that is, no time frame is specified within which
certain termination payments are to be made.
[74] One provision of the FW Act that does deal expressly with the timing of a termination
payment is s.117:
117 Requirement for notice of termination or payment in lieu
Notice specifying day of termination
(1) An employer must not terminate an employee’s employment unless the employer has
given the employee written notice of the day of the termination (which cannot be before the
day the notice is given).
Note 1: Section 123 describes situations in which this section does not apply.
Note 2: Sections 28A and 29 of the Acts Interpretation Act 1901 provide how a notice may
be given. In particular, the notice may be given to an employee by:
(a) delivering it personally; or
(b) leaving it at the employee’s last known address; or
(c) sending it by pre-paid post to the employee’s last known address.
Amount of notice or payment in lieu of notice
(2) The employer must not terminate the employee’s employment unless:
(a) the time between giving the notice and the day of the termination is at least the
period (the minimum period of notice) worked out under subsection (3); or
(b) the employer has paid to the employee (or to another person on the employee’s
behalf) payment in lieu of notice of at least the amount the employer would have been
liable to pay to the employee (or to another person on the employee’s behalf) at the
full rate of pay for the hours the employee would have worked had the employment
continued until the end of the minimum period of notice. [emphasis added]
[2016] FWCFB 8463
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[75] Subsections 123(1) – (3) provide that Division 11 and Subdivision A of Division 11 of
Part 2-2 (which include s.117) do not apply to certain categories of employees, as follows:
123 Limits on scope of this Division
Employees not covered by this Division
(1) This Division does not apply to any of the following employees:
(a) an employee employed for a specified period of time, for a specified task, or for the
duration of a specified season;
(b) an employee whose employment is terminated because of serious misconduct;
(c) a casual employee;
(d) an employee (other than an apprentice) to whom a training arrangement applies and
whose employment is for a specified period of time or is, for any reason, limited to
the duration of the training arrangement;
(e) an employee prescribed by the regulations as an employee to whom this Division
does not apply.
(2) Paragraph (1)(a) does not prevent this Division from applying to an employee if a
substantial reason for employing the employee as described in that paragraph was to
avoid the application of this Division.
Other employees not covered by notice of termination provisions
(3) Subdivision A does not apply to:
(b) a daily hire employee working in the building and construction industry (including
working in connection with the erection, repair, renovation, maintenance, ornamentation
or demolition of buildings or structures); or
(c) a daily hire employee working in the meat industry in connection with the slaughter
of livestock; or
(d) a weekly hire employee working in connection with the meat industry and whose
termination of employment is determined solely by seasonal factors; or
(e) an employee prescribed by the regulations as an employee to whom that Subdivision
does not apply.
[76] No regulations have been made pursuant to s.123(3)(e).
[77] The proper construction of s.117(2) was considered by White J in Melbourne Stadiums
Limited v Sautner:
‘On its proper construction, s 117(2) prohibits the termination of an employee’s employment
unless (relevantly) the employer “has paid” the requisite payment in lieu of notice.
A contravention of s 117(2) is a contravention of a National Employment Standard for which a
civil penalty may be imposed: Fair Work Act, s 44(1) and s 539. Accordingly, employers who
terminate an employee’s employment in the circumstances contemplated by s 117(2) without
[2016] FWCFB 8463
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providing the minimum period of notice or by making a payment in lieu at the time of the
termination are likely to expose themselves to the imposition of a civil penalty.’30
[78] On a literal reading s.117(2) prohibits an employer terminating the employment of an
employee without giving the prescribed ‘minimum period of notice’ (s.117(2)(a)), or making
payment in lieu of notice before or at the time of termination of employment (s.117(2)(b)).
The remedy lies in an application for a penalty for contravention of the provision.31 How
s.117(2)(b) sits with some of the existing award provisions in relation to payment on
termination is unclear.
[79] It is also relevant to note that s.117 does not cover all of the means by which
employment may be terminated. An employee’s employment may be terminated: by mutual
agreement; at the initiation of the employer (e.g. depending on the terms of the employment
contract, by giving the required notice, making a payment in lieu of notice or by summarily
dismissing the employee), or it may be initiated by the employee resigning. An employment
contract may also be terminated by operation of law, independently of the parties – for
example, by frustration.32 The central point is that not all instances of termination of
employment are within the control of the employer. Indeed, the available data suggests that
only about a third of all terminations are initiated by the employer. Most of the other
two-thirds of terminations appear to be initiated by employees resigning from their
employment.33
[80] The means by which a contract of employment is terminated determines the time at
which the employment ends. A valid notice of termination operates according to its terms and
brings the contract to an end when the notice expires.34 Where a contract permits termination
by payment in lieu of notice the contract will end upon such payment being made.35
[81] We now turn to the submissions in respect of the provisional views expressed in our
Statement of 14 October 2016.
[82] The various employer bodies that made submissions generally supported the default
term and the proposition that it should be inserted in all 122 modern awards. Ai Group and
ABI abandoned the award variations they had initially proposed in favour of inserting the
default term in the awards subject to their applications, in lieu of the existing termination
payment terms. Some limited modifications to the default term were proposed by some
employer parties to accommodate the particular circumstances in certain modern awards –
such as the incidence of daily hire in some construction awards and the payment of
commissions in some awards. In the event we decided to proceed with a model term, various
parties sought an opportunity to comment on the appropriateness of inserting such a model
term into particular modern awards.
[83] The unions which made submissions generally opposed the Ai Group/ABI claims, the
default term and the proposition that it be inserted into all modern awards. Four broad lines
of argument are advanced in support of this position:
(i) The entitlement to termination payments arises on termination and that is when
the employee should receive the payments – the payments owed to the
employee are in relation to work that has already been performed and leave
which has already accrued.
[2016] FWCFB 8463
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(ii) If termination payments are made in accordance with the employees’ usual pay
cycle, an employee may have to wait for up to a month to receive their
payment.
(iii) Employees need to plan ahead and knowing their termination entitlements is
critical to budget planning. A delay in being provided with this information
may delay an employee’s access to Newstart.
(iv) Insufficient evidence has been adduced to warrant the variations proposed.
[84] It is uncontested that there seems to be a legislative gap with respect to the time period
within which termination payments are to be made. Section 323 does not appear to cover all
termination payments and no other provision of the FW Act deals with the timing of
termination payments generally.
[85] The obligations and entitlements of employers and employees in respect of
termination payments (and the time within which they are to be paid) should be expressed in
clear and simple terms. The modern award system should be simple and easy to understand.
[86] We confirm our provisional view that each modern award should provide for the
payment of wages and other amounts owing to an employee on termination of employment.
Such a term should also prescribe the timeframe within which such termination payments are
to be made.
[87] We also confirm our provisional view that there is utility in common ‘payment on
termination’ provision across all 122 modern awards. But we accept that each modern award
is to be reviewed in its own right and there may be sound reasons for departing from a model
term in a particular modern award. A case by case assessment is required.
[88] We turn next to the content of the provisional default term. The modern awards
objective is to ‘ensure that modern awards, together with the NES, provide a fair and relevant
minimum safety net of terms and conditions’. Fairness in this context is to be assessed from
the perspective of employees and employers covered by the modern award in question. A
‘fair’ model term in respect of termination payments appropriately balances the issues raised
on behalf of employees and those raised on behalf of employers.
[89] The arguments advanced by ABI and Ai Group in support of the variation of current
termination payment terms can be divided into two broad categories:
impracticability; and
administrative cost.
[90] The impracticability arguments point to the inherent difficulty in providing
termination payments at, or shortly after, the time of termination. We accept that this would
be so in some instances, particularly in cases of summary dismissal and where an employee
resigns their employment without giving notice. In such cases it may plainly take some time
to calculate accrued leave payments. In cases of redundancy the applicable taxation
arrangements may depend upon the particular circumstances and employers (particularly
small businesses) may have to obtain advice externally before processing termination
payments. We also accept that on the available data, the majority of terminations are not
[2016] FWCFB 8463
26
initiated by the employer so that the timing of the termination of employment is not within the
employer’s control.
[91] The administrative cost argument points to the cost associated with making
termination payments outside the ordinary pay cycle at the workplace. There may be a time
cost associated with obtaining immediate information about the time worked in the pay period
in which termination occurred. Some employers may also be charged an additional cost for
‘out of cycle’ EFT transactions. We accept that some employers are likely to face such costs,
but the costs are not likely to be substantial. As ABI puts it in its submission, in relation to
‘out of cycle’ EFT transactions:
‘(o) It is not submitted that all employers would face this additional cost. The cost
associated with making additional payments will depend on the particular employer and their
commercial arrangements with relevant banks.
(p) However, if the Commission accepts that this is a type of cost that employers can face
when processing payments outside of the ordinary pay cycle, it is a matter relevant to the
impact of modern awards on business, employment costs and the regulatory burden – all of
which must be considered pursuant to section 134(1)(f) of the FW Act.’36
[92] If termination payments are made, part of an employee’s termination payment is likely
to be in respect of work that the employee has already performed and leave that has already
accrued. It is appropriate that such payments be made in a timely way. We accept that if
termination payments are made in accordance with the employee’s usual pay cycle – as
permitted in the provisional default term – an employee may have to wait up to a month to
receive their payment. A period of up to a month is too long. It does not satisfy the
requirement for a fair and relevant minimum safety net.
[93] But we also accept that there is considerable force in the ‘impracticability’ argument
advanced by ABI and Ai Group. It is not fair to employers to require all termination
payments to be made either at the time of termination or within a few days thereafter.
[94] It is also relevant that a delay in the payment of the amounts owing to an employee
upon the termination of their employment may delay their access to social security payments.
[95] As pointed out by the AMWU, under the provisional default term it is conceivable that
some employees may have to wait for up to a month before they receive their termination
entitlements. Such a delay may impact on the capacity for employees whose employment has
been terminated to access Newstart or other social security benefits.
[96] According to information received from the Department of Social Services37, an
applicant for Newstart may be subject to a number of waiting periods including a Liquid
Assets Waiting Period (LAWP) or an Income Maintenance Period (IMP). The LAWP may
require an applicant to wait for up to 13 weeks before they can access Newstart, depending
upon the amount of funds that are readily available to them. The definition of ‘liquid assets’
for the purpose of the LAWP includes money owed to the applicant by their former employer.
The IMP involves an assessment of the termination payments received by an employee
against the employee’s ‘ordinary income’. The number of weeks of ordinary income
represented by the termination payment then forms the basis of the IMP. As a general rule,
the IMP takes effect from the date the employer pays the termination payment.38
[2016] FWCFB 8463
27
[97] The AMWU submits that under the default term:
‘… these employees – who know that they are owed money, but not exactly how much – may
have to wait until the monies are paid before they can accurately inform Centrelink of how
much cash they have on hand. This may result in them delaying their initial application to
Centrelink for up to a month, effectively increasing their waiting period before they can access
important benefits by the same period of time.’39
[98] In reply, ABI submits that employees could make an estimate of their termination
payments if they exercised their right to obtain information in relation to their annual leave
accruals, rate of pay and hours worked, pursuant to Part 3-6 of the Fair Work Regulations
2009 in addition to relying on past payslips. The difficulty with this submission is that an
employee’s right to obtain such information is subject to the provisions of Regulation 3.42(3)
and (4):
‘(3) If the employee record is kept at the premises at which the employee works or the former
employee worked, the employer must:
(a) make the copy available at the premises within 3 business days after receiving the
request; or
(b) post a copy of the employee record to the employee or former employee within 14
days after receiving the request.
Note: Subregulation (3) is a civil remedy provision to which Part 4-1 of the Act applies. Division 4 of
Part 4-1 of the Act deals with infringement notices relating to alleged contraventions of civil remedy
provisions.
(4) If the employee record is not kept at the premises at which the employee works or the
former employee worked, the employer must, as soon as practicable after receiving the
request.
(a) make the copy available at the premises; or
(b) post a copy of the employee record to the employee or former employee.
Note 1: Subregulation (4) is a civil remedy provision to which Part 4-1 of the Act applies. Division 4 of
Part 4-1 of the Act deals with infringement notices relating to alleged contraventions of civil remedy
provisions.
Note 2: Under the Act, an inspector is also permitted to inspect and copy an employee record for the
purposes of the Act. The inspector may also require the production of the employee record.’
[99] We think an appropriate balance between the various considerations is for the model
term to provide that all unpaid wages and all other amounts due to an employee under the
modern award and the NES are to be paid ‘no later than 7 days after the employee’s last day
of employment’.
[100] Such a provision ensures that employees receive their termination payments in a
timely way while providing employers with sufficient time to calculate and pay the sums due.
Such a term would address the ‘impracticability’ arguments advanced on behalf of the
employers. We accept that we may impose some ‘time costs’ associated with obtaining
information about the hours worked in the prior pay period and may require ‘out of cycle’
EFT transactions in some instances, but the costs involved are unlikely to be substantial.
[101] Having regard to the terms of the NES, there two potential qualifications to a
requirement to make payment ‘no later than 7 days after the employee’s last day of
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employment’ that need to be considered. The first relates to s.120 and the second to
s.117(2)(b) of the FW Act.
[102] Section 120 of the FW Act provides that in some circumstances an employer can apply
to the Commission for a determination that the amount of redundancy pay to which an
employee is entitled under the NES is reduced to a specified amount (which may be nil). The
relevant circumstances are that an employee is entitled to be paid an amount of redundancy
pay by the employer because of s.119 and either the employer obtains ‘other acceptable
employment’ for the employee or the employer is unable to pay that amount of redundancy
pay.
[103] Absent a qualification to the proposed requirement to make payment ‘no later than 7
days after the employee’s last day of employment’, if an application is made under s.120 and
the application is not determined by the Commission and any reduced amount of redundancy
pay paid by the employer by the end of that time period, the employer will breach the award.
[104] The provisional default term will be qualified so that, where an employer has made an
application under s.120, the Commission will be able to make an order delaying the
requirement to pay redundancy pay to which the employee is entitled under FW Act s.119,
until a specified day after the Commission has determined the application. It is envisaged
that, consistent with the usual payment requirement under the default term, such orders would
generally require payment of the amount (if any) to which the employee is entitled in
accordance with the Commission’s decision on the application no later than seven days after
the date of that decision.
[105] We are also satisfied that the provisional default term requires qualification to deal
with the interaction with s.117(2)(b).
[106] As we have mentioned, on a literal reading s.117(2) prohibits an employer terminating
the employment of an employee without (relevantly) making payment in lieu of notice before,
or at the time of, termination of employment.
[107] Section 55 of the FW Act provides for the interaction of modern awards and the NES:
A modern award must not exclude the NES or any provision of the NES (s.55(1)).
A modern award may include any terms that the award is expressly permitted to
include by a provision of Part 2-2 (which deals with the NES) (s.55(2)).40
A modern award may include terms that:
(i) are ancillary or incidental to the operation of an entitlement of an employee
under the NES; or
(ii) terms that supplement the NES (s.55(4)).
[108] The statutory notes41 to s.55(4) provide examples.
‘Note 1: Ancillary or incidental terms permitted by paragraph (a) include (for example) terms:
(a) under which, instead of taking paid annual leave at the rate of pay required by
section 90, an employee may take twice as much leave at half that rate of pay; or
[2016] FWCFB 8463
29
(b) that specify when payment under section 90 for paid annual leave must be made.
Note 2: Supplementary terms permitted by paragraph (b) include (for example) terms:
(a) that increase the amount of paid annual leave to which an employee is entitled
beyond the number of weeks that applies under section 87; or
(b) that provide for an employee to be paid for taking a period of paid annual leave or
paid/personal carer’s leave at a rate of pay that is higher than the employee’s base
rate of pay (which is the rate required by sections 90 and 99).
Note 3: Terms that would not be permitted by paragraph (a) or (b) include (for example) terms
requiring an employee to give more notice of the taking of unpaid parental leave than is
required by section 74.’
[109] Section 55(1) provides, relevantly, that a modern award ‘must not exclude’ the NES or
any provision of the NES. An exclusion for the purpose of s.55(1) is not confined to award
provisions which purport to oust the operation of a provision of the NES (such as s.117(2)(b))
in express terms. If the operation of an award term would result in employees not receiving
(in full or at all) a benefit provided by the NES, that constitutes a prohibited exclusion of the
NES.42
[110] If the literal meaning of s.117(2) is the correct construction then, absent a variation to
the provisional default term, employers may be inadvertently misled into a contravention of
s.117(2)(b).
[111] Ai Group and ABI support the inclusion of a note to ensure that employers are not
inadvertently misled into a contravention of s.117(2)(b). ABI proposed a note in the
following terms:
‘Note: Employers who do not provide written notice of termination but instead provide a
payment in lieu of notice must comply with s.117(2)(b) of the Fair Work Act, which requires
payments in lieu of notice to be made at or before the time of termination.’
[112] ABI submits that such a note will serve as an important contextual guide which
confirms that the provisional default term is not intended to operate in a manner inconsistent
with s.117(2)(b) and will ensure no person is misled as to their payment obligations in respect
of the termination of an employee’s employment.
[113] Ai Group expressed some reservations about the breadth of the note proposed by ABI.
Others expressed reservations about the inclusion of a note, in whatever form.
[114] Of course, s.117(2)(b) only applies to payments in lieu of notice and hence it regulates
a narrower range of entitlements than those covered by the default term. A model term would
also cover, for example, payments for accrued leave, wages for time actually worked and
redundancy pay.
[115] We think the provisional default term should be amended to make clear that it is
subject to s.117(2)(b) and to include a note drawing attention to that statutory provision. The
note will be phrased so as to avoid the need to form a concluded view about the proper
construction of s.117(2)(b).
[2016] FWCFB 8463
30
[116] We also think the provisional default term should be amended to make clear that
employees are entitled to be paid wages in respect of any incomplete pay period worked up to
the end of the employee’s employment. As discussed in section 2.4 of this decision, absent
provision to this effect, there might be doubt as to whether an employee is entitled to be paid
wages for an uncompleted pay period.
[117] The provisional ‘payment on termination of employment’ model term will now be:
Payment on termination of employment
(a) Subject to paragraph (b), the employer must pay an employee no later than 7 days
after the employee’s last day of employment:
(i) the employee’s wages for any complete or incomplete pay period up to the end
of the employee’s last day of employment; and
(ii) all other amounts that are due to the employee under this award and the NES.
(b) The requirement to pay an employee no later than 7 days after the employee’s last
day of employment is subject to s.117(2) of the Act and to any order of the
Commission in relation to an application under s.120 of 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: Section 120 of the Act provides that in some circumstances an employer can
apply to the Commission to reduce the amount of redundancy pay an employee is
entitled to under the NES. In dealing with an application, the Commission could make
an order delaying the requirement to make payment until after the Commission makes
a decision on the application.
[118] The wording of paragraph (i) of the provisional model term is intended to ensure that
wages accrue under the award in respect of any incomplete pay period worked by the
employee (for example, if the employee’s employment ends after the employee has worked
only two days of a one week pay period). The wording of paragraph (ii) of the provisional
model term assumes that all amounts other than wages that should be paid to an employee
after termination of the employee’s employment, accrue under the terms of the award or the
NES either during any complete or incomplete pay period worked by the employee before the
termination or upon termination. Accrual of payments under modern awards and the NES is
discussed in section 2.4 of this decision.
[119] We propose to take the following steps in relation to this issue. Written submissions
by interested parties wishing to comment on the provisional model term, including its
treatment of accrual of payments as discussed further in section 2.4 of this decision, are to be
filed by 4 pm on Thursday 22 December 2016 and submissions in reply by 4 pm on
Thursday 2 February 2017, with liberty to apply. All submissions are to be sent to
amod@fwc.gov.au and will be published on the Commission’s website in the usual way. The
matter will be listed for hearing on Wednesday 8 February 2017.
[120] A further process will occur in relation to the questions of which modern awards
should be varied to insert the model term. As we have noted, we have concluded that each
mailto:amod@fwc.gov.au
[2016] FWCFB 8463
31
modern award should provide for the payment of wages and other amounts owing to an
employee on termination of employment. Such a term should also prescribe the timeframe
within which such termination payments are to be made.
[121] We have also confirmed our provisional view that there is utility in a common
payment on termination provision across all 122 modern awards. But we accept that each
modern award is to be reviewed in its own right and that there may be sound reasons for
departing from the model term in a particular modern award. A case by case assessment will
be required.
[122] Accordingly, once the model term has been settled we will issue a Statement setting
out the process for considering which modern awards are to be varied to insert the model
term. Interested parties will be given an opportunity to comment on whether particular
modern awards should be varied to insert the model term.
2.4 Accrual of wages and other amounts
[123] As discussed above, s.323 of the FW Act deals with the method and frequency with
which employers must pay an employee ‘amounts payable to the employee in relation to the
performance of work’, and appears to have the effect that such amounts must be paid no later
than one month after accrual. Section 323 does not specify when ‘amounts payable to the
employee in relation to the performance of work’ become payable, that is, when the
entitlement to payment accrues.
[124] The FW Act does specify when various payments under the NES accrue. For
example, the entitlement under the NES to payment in lieu of untaken paid annual leave and
to redundancy pay is expressed to arise upon termination of employment (see ss.90(2) and
119(1)). As discussed at paragraphs [74] – [78] above, it seems that the FW Act requires
payment in lieu of notice under the NES to be made before or at the time of termination of
employment (s.117(2)) and the entitlement to redundancy pay under the NES would seem to
arise when an employee’s employment is terminated in certain circumstances (s.119(1)).
Entitlement under the NES to payment for paid annual leave or for paid personal/carer’s
leave, is expressed to arise when an employee takes a period of such leave (ss.90(1) and 99)
and similarly with compassionate leave (s.106), absence on jury service (s.111(2)) and
absence on a public holiday (s.116).
[125] Notably, the FW Act does not appear to specify when wages accrue. In contrast, s.67
of the Fair Work Act 1994 (SA) provides:
67—Accrual of wages
(1) Wages accrue under a contract of employment from week to week.
(2) However—
(a) if an employee is employed on an hourly basis, wages accrue from hour to
hour; and
(b) if an employee is employed on a daily basis, wages accrue from day to day;
and
(c) if a person is employed on neither an hourly nor a daily basis, but the period
of employment is less than a week, wages accrue at the end of the period of
employment.
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32
[126] Academic commentary suggests that, absent express provision for accrual in an award,
if wages are required to be paid periodically under the award (for example, weekly,
fortnightly or monthly) then they will be taken to accrue with at least the same frequency.43
[127] This would seem to accord with the terms of many award ‘payment of wages’ clauses.
For example, the ‘minimum weekly wages’ clause (cl.17) of the General Retail Industry
Award 2010 contains only a table of weekly wage rates for the award classifications and does
not expressly provide for accrual of wages whether on a weekly, daily, hourly or other basis.
However, the wording in the ‘payment of wages’ clause of that award (cl.23, as reproduced at
paragraph [11] above) ‘[w]ages will be paid weekly or fortnightly’, might be read as entailing
that wages must accrue at least weekly or fortnightly.
[128] In contrast to the ‘minimum weekly wages’ clause of the General Retail Industry
Award 2010, express provision is made in the award for accrual, for example, of a meal
allowance (see cl.18.1) and payment at overtime rates (see cl.20.1) during a pay period. It
should be noted that some award terms may also provide for payment to be made in a
subsequent pay period. For example, the ‘time off instead of payment for overtime’ model
term includes the requirement that:
‘If time off for overtime that has been worked is not taken within the period of 6 months …
[after the overtime is worked,] the employer must pay the employee for the overtime, in the
next pay period following those 6 months …’
[129] The period over which wages accrue is of significance because the employee only
earns wages for completing each such period.44 Absent express provision for accrual, there
may be a question as to whether an employee whose employment ends part way through a pay
period is entitled to wages for the incomplete period. For example, if an employee is paid
weekly and the employee’s employment ends after three and a half days of a weekly pay
period, there may be a question as to whether the employee is entitled to any wages for those
three and a half days. If the employee’s wages accrue for working a week, the employee will
not be entitled to wages for the three and a half days (although the employee may have a basis
to claim some other form of compensation45). If the employee’s wages accrue on a daily
basis, the employee will be entitled to wages for the three complete days that were worked in
the pay period, but not for the half day. If the employee’s wages accrue on an hourly basis,
the employee will also be entitled to wages for complete hours worked on the half day. 46
[130] It has been suggested that an employee’s wages under an award will be taken to accrue
hourly if the award specifies an hourly wage rate for the employee (perhaps in addition to a
daily, weekly, annual or other rate) or the award specifies that wages are to be calculated on
the basis of hours worked,47 but not all awards make such provision.
[131] These considerations point to another potential regulatory gap in relation to payment
of wages and other amounts under awards.
[132] The obligations and entitlements of employers and employees in respect of wages and
other amounts payable under modern awards (and when they become payable) should be
expressed in clear and simple terms. The modern award system should be simple and easy to
understand.
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33
[133] As discussed earlier, the wording of subparagraph x.1(a)(i) of the provisional
‘payment of wages and other amounts’ model term at paragraph [34], is intended to ensure
that wage payments accrue under the award by the end of each pay period. Whether provision
to this effect is necessary (or whether it would suffice simply to require payment of ‘wages
due for the pay period’), may depend upon the wording of the minimum wage provisions of
the particular award concerned. Subparagraph x.1(a)(ii) of the provisional model term
assumes that all amounts other than wages provided for in the award or the NES that should
be paid to an employee in respect of a pay period, accrue under the terms of the award or the
NES in the pay period. Whether this is the case, may also depend upon the wording of the
clauses prescribing allowances, overtime, penalty rates and so forth in the particular award
concerned.
[134] As also discussed earlier, the wording of paragraph (i) of the provisional model
‘payment on termination of employment’ model term at paragraph [117], is intended to ensure
that wages accrue under the award in respect of any incomplete pay period worked by the
employee prior to the employee’s employment ending. Again, whether provision to this
effect is necessary, may depend upon the wording of the minimum wage provisions of the
particular award concerned. This wording does not seek to clarify whether an employee is to
be paid wages for a part of a day or a part of an hour worked in an incomplete pay period.
[135] Similarly to the provisional ‘payment of wages and other amounts’ model term, the
wording of paragraph (ii) of the provisional ‘payment on termination of employment’ model
term assumes that all amounts other than wages that should be paid to an employee after
termination of the employee’s employment, accrue under the terms of the award or the NES
either during any complete or incomplete pay period worked by the employee before the
termination or upon termination.
[136] The issue of when payments accrue under modern awards might arise in the context of
the Fair Work Ombudsman (FWO) assisting employees or former employees to recover
unpaid wages and other amounts. The Full Bench would appreciate receiving information
from FWO as to whether lack of clarity as to accrual of wages and other amounts, particularly
in respect of incomplete pay periods, is an issue for FWO in practice.
2.5 Penalty for late payment of wages
[137] We note that the Health Services Union (the HSU) has indicated that it will not be
pursuing its foreshadowed claim to introduce penalties for the late payment of wages into
three modern awards: Aboriginal Community Controlled Health Services Award 2010; Aged
Care Award 2010; and Social Community, Home Care and Disability Services Industry
Award 2010.
[138] ABI and the Master Builders Australia (MBA) have made applications to vary the
terms of certain awards which presently provide a penalty for late payment of wages.
[139] MBA has made claims48 to delete the penalty for late payment of wages in the
following awards:
Building and Construction General On-site Award 2010 (the On-site Award); and
Joinery and Building Trades Award 2010 (the Joinery Award).
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34
[140] The On-site Award provides that an employee paid by cash or cheque is entitled to
payment at overtime rates if the employee is kept waiting for their wages for more than
15 minutes after finishing work on payday (other than in circumstances beyond the control of
the employer).49 The Joinery Award provides that an employee who does not receive their pay
by the cessation of ordinary hours of work on Thursday is entitled to payment for waiting
time at overtime rates (other than in circumstances beyond the control of the employer).50
[141] The interested parties in relation to these two awards have expressed a preference for
these issues to be dealt with during the Award stage of the Review and that is the course
which we will adopt.
[142] ABI is seeking to vary the provisions in 10 modern awards which impose a penalty for
late payment of wages. The relevant awards are:
Cleaning Services Award 2010;
Hospitality Industry (General) Award 2010;
Joinery and Building Trades Award 2010;
Plumbing and Fire Sprinklers Award 2010;
Professional Diving Industry (Industrial) Award 2010;
Professional Diving Industry (Recreational) Award 2010;
Racing Industry Ground Maintenance Award 2010;
Registered and Licensed Clubs Award 2010;
Silviculture Award 2010;and
Supported Employment Services Award 2010.
[143] Consistent with the approach taken in relation to the MBA’s application we will refer
ABI’s application to vary the Joinery Award to the Award stage of the Review. This decision
deals with ABI’s proposed variations in respect of the remaining nine awards.
[144] ABI’s variations remove the penalty for late payment of wages in circumstances where
wages are paid by EFT.
[145] We turn first to some recent Full Bench decisions dealing with award terms which
provide for a penalty for the late payment of wages.
[146] In Re: Timber Industry Award 2010 (No.1)51 a Full Bench considered a jurisdictional
objection by the MBA to the proposal by the CFMEU to vary the award to include a term
providing for the payment of a penalty upon the late payment of wages. The Full Bench
rejected the MBA’s jurisdictional objection. The Full Bench did not decide the merits of such
a variation and nor did it decide whether such a term fell within the power conferred on the
Commission by s.139(1), in particular the power to include terms about ‘penalty rates’.
However, in relation to the latter matter the Full Bench said:
‘… it is unnecessary for us to express a view about the correctness of the CFMEU’s
submission although we think the proposed term does not sit comfortably being described as a
‘penalty rate’. It seems to us more likely that the power to include the term contained in the
CFMEU proposal must, if it exists, be found in s.142(1) of the FW Act.’52
[147] In Re: Timber Industry Award 2010 (No.2)53 a differently constituted Full Bench
considered the merits of the CFMEU’s proposal and whether the term sought constituted a
[2016] FWCFB 8463
35
‘penalty rate’ within the meaning of s.139(1)(e). As to the second matter the Full Bench was
not persuaded that the proposed term was a ‘penalty rate’:
‘In our view … the CFMEU’s proposal is not a ‘penalty rate’ provision within the meaning of
s.139(e) of the Act. Reflecting common industrial usage, ‘penalty rate’, for the purpose of
s.139(e) of the Act is a higher rate of pay to which an employee is entitled in compensation for
the inconvenience or disabilities associated with performing work at a particular time,
consistent with the non-exhaustive examples within s.139(e). We are not persuaded that a
provision of the character … proposed by the CFMEU – a payment an employer is required to
make to an employee as a penalty for the late payment of wages – is a ‘penalty rate’ within the
meaning of s.139(e) of the Act …
Accordingly, the power to include the term contained in the CFMEU’s proposal must, if it
exists, be found in s.142(1) of the Act’.54
[148] In terms of s.142(1), the Full Bench accepted that an award provision for the
imposition of a penalty for the late payment of wages was ‘incidental’ to those elements of
s.139 dealing with payments to employees: minimum wages; overtime rates; penalty rates,
and allowances. However, the Full Bench was not satisfied that the proposed term was
‘essential for the purpose of making a particular term operate in a practical way’ as required
by s.142(1)(b), noting that:
‘The CFMEU submitted that the variation is necessary to ensure employers took their
responsibility to pay wages on time under the Timber Award seriously and thereby enhance
compliance with the obligation. However, it is not clear, given the penalties for non-
compliance with an award in the Act why an additional incentive is necessary, nor, from the
evidence as a whole, that the provision would enhance compliance.’55
[149] As to the modern awards objective, the Full Bench concluded:
‘… we are not satisfied that the CFMEU’s case, and the evidence which supports it,
establishes a practical problem in relation to the current payment of wages provision which
makes the variation it proposes necessary to meet the modern awards objective. Whilst there
was evidence of some incidences of late payment, it falls short of establishing an incidence of
late payment in the timber industry of a frequency which would make the variation sought
necessary.’56
[150] Of particular relevance to the matters before us is the observation by the Full Bench in
respect of the imposition of a penalty for late payment where wages are paid by EFT:
‘… as a matter of merit, we think that the prescription of payment in respect of time spent by
an employee waiting for a late payment by cash or cheque, in respect of the delayed departure
of an employee from their place of employment because their wages are not paid on time is
qualitatively different from the imposition of a penalty in respect of late payment by EFT.’57
[151] This issue was also considered in the context of an application to delete the penalty for
late payment applying to payment by cash, bank cheque or EFT in the Professional Diving
Industry (Industrial) Award 2010. In that matter the Full Bench adopted the views expressed
in Re: Timber Industry Award 2010 (No.2) as follows:58
‘[233] We agree with the sentiment that late payment penalties are not appropriate in
circumstances where employees are paid by electronic funds transfer (EFT). We also agree
[2016] FWCFB 8463
36
with the comments of Mayo J of the South Australian Supreme Court in Cranford-Webster v
McFarlane59:
“I think it means time which the employee spends at the employer’s establishment
actually waiting for his pay …
‘Waiting time’ would mean in its ordinary sense the time that an employee spent and
wasted in loitering about whilst payment of wages to him was not forthcoming. The
appropriate meaning to be given to ‘waiting’ would seem to be staying in expectation,
stopping or remaining stationary, or inactive till the happening of the event, holding
over departure.”
[234] However the Exposure Draft provides, at clause 10.3(b) that wages may be paid by cash,
bank cheque or EFT. In circumstances where wages are paid in cash or bank cheque the
penalty for late payment (in clause 10.3(c)) remains relevant. For that reason we do not
propose to amend the Exposure Draft in the manner suggested by AMMA.’
[152] The following general propositions may be derived from the decisions referred to
above:
1. A term which imposes a penalty for late payment of wages is not a ‘penalty rate’
provision within the meaning of s.139(1)(e), but such a term may be included in a
modern award if it meets the requirements of s.142.
2. As a matter of merit, providing a penalty for late payment in circumstances where
an employee is kept waiting at their workplace for their wages to be paid is
qualitatively different from imposing a penalty for late payment when wages are
paid by EFT. Late payment penalties are, generally, not appropriate in
circumstances where employees are paid by EFT.
[153] United Voice and the AWU do not oppose the ABI application to vary the remaining
nine awards referred to at [142]-[143] above. No other party made submissions in respect of
ABI’s application. (Noting that the application to vary the Joinery Award was referred to the
Award stage of the Review.)
[154] We accept that, as a general proposition, late payment penalties are not appropriate in
circumstances where employees are paid by EFT. We acknowledge that there may be
circumstances pertaining to a particular modern award that warrant a different approach. But
no such circumstances were advanced in respect of the modern awards before us.
[155] We are satisfied that the existing terms in these nine modern awards lack merit insofar
as they impose a penalty for the late payment of wages where employees are paid by EFT. To
that extent the existing terms are not ‘fair’ within the meaning of the modern awards
objective. In arriving at that conclusion we have taken into account the matters set out in
s.134(1)(a) to (h), insofar as they are relevant. It is likely that some of the employees covered
by these awards are ‘low paid’ within the meaning of s.134(1)(a) and that the variation
proposed may be said to diminish the capacity of those employees to meet their needs. But
the impact is likely to very limited as the penalty payment only arises in very limited
circumstances. Similarly, the variations may reduce employment costs (s.134(1)(f)), but only
to a very limited extent.
[2016] FWCFB 8463
37
[156] We propose to vary the nine modern awards which are the subject of the ABI
application before us. Draft variation determinations will be issued shortly. Interested parties
will have 7 days to comment on the drafts.
[157] In the event we granted ABI’s claim, United Voice submitted that a note should be
inserted into the relevant awards, after the payment of wages clause, indicating that there are
serious consequences for non-compliance. The proposed note was in the following terms:
‘Note: subsection 323(3) of the Fair Work Act states that if a modern award specifies a
particular method by which the money must be paid, the employer must pay the money by this
method and failure to do so is a civil contravention of the Fair Work Act.’
[158] United Voice acknowledges that the proposed note would be merely ‘declaratory’ and
‘would be doing no more than clarifying the position and ensuring that the Award reflects the
importance that the Parliament has chosen to attach to the timely payment of wages’.60
[159] We are not persuaded that a note in the form proposed is necessary. There is no need
to clarify any particular uncertainty. Further, contravention of a term of a modern award itself
attracts a civil penalty (s.45) and the maximum penalty (60 penalty units) is the same as that
prescribed for a breach of s.323 (see s.539). There is nothing particularly significant about
the payment of wages clause that would warrant the insertion of such a note. We also observe
that in previous decisions the Commission has declined to vary awards to insert provisions
which may be characterised as ‘aspirational’ and which have little or no work to do.61 We do
not propose to insert a note of the type proposed by United Voice.
[160] Attachment C contains a list of the 20 modern awards which provide penalties for late
payment of wages, including the 10 awards listed at paragraph [142] above. The penalty
provisions in the remaining 10 awards are limited to payment by cash or cheque and so we do
not propose to consider those provisions further.
2.6 Annual leave loading issue
[161] Ai Group seeks to vary three modern awards to address what it submits is an anomaly
in the annual leave clauses relating to provisions dealing with payment of annual leave and
annual leave loading. These awards are:
Electrical, Electronic and Communications Contracting Award 2010;
Food, Beverage and Tobacco Manufacturing Award 2010; and
Joinery and Building Trades Award 2010.
[162] Ai Group submits that the respective award clauses can be read as inappropriately
entitling employees to either:
payment of both the relevant shift loading (and potentially other amounts payable
in respect of ordinary hours) and an additional annual leave loading; or
alternatively, as potentially requiring the payment of such shift loadings twice
when an employee receives annual leave entitlements.
[163] The interested parties have reached an agreement in respect of the proposed variation
of the Electrical, Electronic and Communications Contracting Award 2010 and the Food,
[2016] FWCFB 8463
38
Beverage and Tobacco Manufacturing Award 2010. The submissions advanced in support of
these variations are set out in Ai Group’s written submission of 20 September 2016.
[164] We also note that a similar, but not identical issue, was dealt with in respect of the
Manufacturing and Associated Industries and Occupations Award 201062, where the Full
Bench determined that a clause in the exposure draft would be amended to remove a potential
anomaly that might allow for payment of shift loadings and annual leave loadings for periods
of annual leave.
[165] The proposed variation of the Joinery Award is opposed by the CFMEU.
[166] Subclauses 32.2 and 32.3 of the Joinery Award state:
‘32.2 Payment for period of annual leave
(a) Instead of the base rate of pay as referred to in s.90(1) of the Act, an employee under this
award, before going on annual leave, must be paid the wages they would have received in
respect of the ordinary hours the employee would have worked had the employee not been on
leave during the relevant period.
(b) Subject to clause 32.2(c), the wages to be paid must be worked out on the basis of what the
employee would have been paid under this award for working ordinary hours during the
period of annual leave, including applicable allowances, loadings and penalties paid for all
purposes of the award, first aid allowance, if applicable, and any other wages payable under
the employee’s contract of employment including any overaward payment.
(c) The employee is not entitled to payments in respect of overtime, special rates or any other
payment which might have been payable to the employee as a reimbursement for expenses
incurred.
32.3 Annual leave loading
In addition to the payment prescribed in clause 32.2, during a period of annual leave an
employee must be paid a loading of 17.5% calculated on the minimum wages, loadings and
allowances prescribed by clauses 18—Classifications and minimum wages, 19—Apprentice
minimum wages, 20—Adult apprentice minimum wages, 21— Trainee minimum wages, 22—
Supported wage system and clauses 24.1(b), (c) and (d) as applicable and the leading hand
rates prescribed by clause 24.1(a) if applicable. An employee is also entitled to the 17.5%
loading on any proportionate leave on termination.’
[167] In 2013 Ai Group sought to vary cl.32.2(c) pursuant to s.160 of the FW Act, on the
basis that cl.32.2(b) was ambiguous and uncertain. In particular, it was contended that it was
unclear whether the rate of pay which was to be paid to an employee for a period of annual
leave was – in the case of shiftworkers – to include the shift rates in cl.28.3(d). The
application was dismissed by Senior Deputy President Drake63 on the basis that the relevant
provision was not ambiguous or uncertain – shift rates were to be paid to shiftworkers on a
period of annual leave.
[168] In the present proceedings Ai Group seeks to delete cl.32.2(c) and insert the following
term:
[2016] FWCFB 8463
39
‘(c) The employee is not entitled to payments in respect of overtime, shift rates, special rates or
any other payment which might have been payable to the employee as a reimbursement for
expenses incurred.’
[169] Ai Group also proposes the deletion of cl. 32.3 and that it be replaced with the
following term:
‘(a) In addition to the payment prescribed in clause 32.2, during a period of annual leave an
employee must be paid a loading of 17.5% calculated on the minimum wages, loadings and
allowances by clauses 18—Classifications and minimum wages, 19—Apprentice minimum
wages, 20—Adult apprentice minimum wages, 21—Trainee minimum wages, 22—Supported
wage system and clauses 24.1(b), (c) and (d) as applicable and the leading hand rates
prescribed by clause 24.1(a) if applicable. An employee is also entitled to the 17.5% loading
on any proportionate leave on termination.
(b) An employee who would have worked on shiftwork had they not been on leave
must be paid a loading equal to that prescribed in clause 32.3(a) or the shift
rates prescribed by this award, whichever is the greater but not both.’
[170] The intent of the variations is to ensure that employees do not receive both a shift
loading and an annual leave loading during a period of annual leave, rather, they will receive
whichever is the greater.
[171] We note that the Joinery Award was largely based on the National Joinery and
Building Trades Products Award 2002 (the 2002 Award),64 as it applied in the off-site sector.
The relevant clause in the 2002 Award was cl.30.7, which was in the following terms:
‘30.7 Payment for Period of Leave
30.7.1 Each employee, before going on leave, shall be paid in advance the wages which would
ordinarily accrue to the employee during the currency of the leave.
Annual Leave Loading
30.7.2 In addition to the payment prescribed in 30.7.1, an employee shall receive during a
period of annual leave a loading of 17.5 per cent calculated on the rates, loadings, and
allowances prescribed by clauses 17, 19.1 and 19.2 and leading hand rates as prescribed by
clause 17.3 if applicable. The loading prescribed above shall also apply to proportionate leave
on lawful termination.’
[172] Ai Group submits that the provisions of the Joinery Award are inconsistent with the
modern awards objective. It is submitted that the current award terms are not ‘fair’ for the
following reasons:
(i) The existing provisions are ‘unreasonable and unjustifiably generous to
employees’ such that they cannot be regarded as forming part of a ‘fair and
relevant minimum safety net of terms and conditions’.
(ii) It is inherently unfair for an employer to pay an employee on annual leave both
their shift loading and an annual leave loading. Such an approach results in
employees on annual leave receiving a much higher level of remuneration than
they would receive while at work.
[2016] FWCFB 8463
40
(iii) The 17.5 per cent loading is calculated on an amount that includes shift rates and
hence the value of the loading for a shift worker will be unfairly increased
compared to that received by day workers, for no apparent reason.
(iv) The existing provisions are ‘out of step’ with the approach adopted in other
awards, which require employers to pay either a 17.5 per cent loading or shift
allowances, whichever is the greater.
[173] As we have mentioned, the CFMEU opposes the variation of the Joinery Award. The
CFMEU’s position is summarised at paragraph 62 of its submission of 14 October 2016:
‘What the AIG are seeking is a reduction of the existing safety net for shiftworkers covered by
the Joinery and Building Trades Award 2010. They have provided no evidence to support the
variation sought, and there is no merit to their argument. The Commission has already
accepted that the Joinery and Building Trades Award 2010 meets the modern awards objective
in the 2012 Award Review. The onus falls on the AIG to show that there has been some
significant change to warrant the Full Bench overturning that finding. As the AIG has failed
on all accounts the proposed variation should be rejected.’65 (emphasis added)
[174] Contrary to the CFMEU’s submission it is not necessary to establish ‘some significant
change’ since the review of the Joinery Award in the Transitional Review.
[175] In conducting the Review the Commission will have regard to the historical context
applicable to each modern award and will proceed on the basis that prima facie the modern
award being reviewed achieved the modern awards objective at the time it was made. The
adoption of the prima facie position is an instance of the general proposition that previous
Full Bench decisions should generally be followed, in the absent of cogent reasons for not
doing so. In the context of the Review it is appropriate to take into account previous Full
Bench decisions relevant to any contested issue. The weight to be accorded to a previous Full
Bench decision depends on the context - the legislative context and the issues considered by
the Full Bench.
[176] The decision relied on by the CFMEU is of little relevance to the present proceeding.
The legislative context was quite different – the Review is broader in scope than the
Transitional Review completed in 2013. Further, in the Transitional Review proceedings there
was no debate as to the merits of the award terms which are the subject of the matter before
us; nor was the issue before us the subject of debate in the award modernisation proceedings.
[177] The CFMEU also points to the fact that the Ai Group has ‘provided no evidence to
support the variation sought’. This point is the subject of some elaboration in the CFMEU’s
written submissions:
‘The AIG claim that the current terms of the award governing the payment of annual leave and
annual leave loading impose an unjustifiable unreasonable cost on employers and that they
exceed the standard of a fair and relevant safety net contemplated by the modern awards
objective.
The AIG however provide no evidence of those costs, nor have they provided any evidence
from employers that they find the costs to be unjustifiable or unreasonable.’66 (emphasis
added)
[2016] FWCFB 8463
41
[178] This submission is misconceived. As the Commission observed in the Preliminary
Jurisdictional Issues decision:
‘… a party seeking to vary a modern award in the context of the Review must advance a merit
argument in support of the proposed variation. The extent of such an argument will depend on
the circumstances.’67
[179] The issue raised by Ai Group is not one that requires probative evidence in support of
the proposed variation. It turns on an assessment of the merits of the award term.
[180] In particular, it is unnecessary to adduce evidence of the costs imposed by the existing
term, as those costs are self-evident from the term itself, and evidence from employers about
their subjective views of the merit of the particular term would be of little assistance.
[181] The issue for us is whether the modern award, together with the NES, provides a fair
and relevant safety net of terms and conditions. Fairness in this context is to be assessed from
the perspective of the employees and employers covered by the modern award in question.
[182] We have concluded that clauses 32.2 and 32.3 do not provide a ‘fair … safety net’.
[183] The existing terms provide that the annual leave payment made to shiftworkers
includes both the applicable shift rate and the 17.5 per cent annual leave loading. It appears
that these terms were inserted into a predecessor award by consent.68 We were not taken to
any arbitral decision which considered the question of annual leave payments in this award
(or a predecessor award).
[184] The provision of an annual leave payment which includes both a shift penalty and a
17.5 per cent loading is unusual. It is not a feature of other construction awards. For
example, the On-site Award provides for the payment of ‘the amount which [the employee]
would have received for working ordinary time hours if they had not been on leave’ and a
17.5 per cent annual leave loading. But clause 38.2(c) provides:
‘Instead of the payment in respect of annual leave loading provided for in clause 38.2(b), an
employee who would have worked on shiftwork had they not been on leave and where the
employee would have received shift loadings prescribed by clause 34 – Shiftwork, had they
not been on leave during the relevant and such loadings would have entitled them to a greater
amount than the loading of 17.5%, then the shift loading as prescribed in clause 34 will be
included in the rate of wage prescribed by clause 38.2(b) instead of the 17.5% loading.’
(emphasis added)
[185] In other words, shiftworkers employed under the On-site Award get either the relevant
shift loading or the 17.5 per cent annual leave loading (whichever is the greater), but not both.
There are similar provisions in the Mobile Crane Hiring Award 2010 (at clause 25.4(b)).
[186] We were not taken to any other modern award which provides that the annual leave
payment to shiftworkers includes both their shift loading and an annual leave loading.
[187] The arbitral consideration of annual leave payments is limited. The issue was given
some attention in the 1971 Annual Leave Case.69 The claims in that case sought:
(i) an increase in the award amount of weekly payment when on annual leave;
[2016] FWCFB 8463
42
(ii) a bonus of an extra week’s pay to employees on annual leave; and
(iii) an increase in the minimum standard of three weeks’ annual leave to four
weeks’ annual leave.
[188] The Commission dismissed claims (ii) and (iii). In respect of claim (i) the
Commission said:
‘The real issue is whether the present amount paid to an employee when he is on annual leave
and therefore not working should be his minimum award wage or something more.
We consider it is our function to assess in an Australian context what is fair and equitable pay
for annual leave under Federal awards… We are in agreement that the present situation which
may result in people going on leave at a rate less than their normal rate when at work could
produce hardship and if it is economically feasible prima facie we should take some steps to
improve that situation.’70
[189] At the time this decision was made many employees under Federal awards were paid
their award minimum rate of pay when they went on annual leave, without the addition of
payments (such as shift loadings) which they may have regularly received when they were at
work.71
[190] In respect of the prima facie view in the 1971 Annual Leave decision that ‘an
employee taking annual leave … shall be paid the amount of wages (or salary) he would have
received in respect of the ordinary time which he would have worked had he not been on
leave during the relevant period’, the Commission made the following ‘announcement’:
‘1. We agree that the question of payment for Annual Leave should be considered award by
award and we therefore deal only with general propositions. In individual awards special
circumstances may require some departure from the norm.
2. Generally speaking it is not our intention to require employers who are already paying an
annual leave bonus to pay both the bonus and the amounts which we suggest.
3. The items which we think should in the general run of cases be included in payment for
Annual leave are as follows: (Individual situations may require in particular awards the
exclusion or modification of them or the addition of other items.)
Over Award Payments for ordinary hours of work.
We think that to include over award payments in private industry would, apart from its
inherent industrial justice, give effect to the view which we stated in our December
decision that employees in the public and private sectors should as far as possible be
treated alike. Because of method of assessment of their salaries many employees in the
Commonwealth Public Service already receive when they go on leave what would be an
over award payment if they were in private industry.
Shift Work Premiums according to roster or projected roster including Saturday, Sunday
or Public Holiday shifts.
Industry Allowances
Climatic, Regional etc. Allowances.
Leading Hand Allowances.
Tool Allowances.
Qualification Allowances.
Service Grants.
[2016] FWCFB 8463
43
4. The matters which we think should in the general run of cases be excluded from payment
for Annual Leave are as follows. (Individual situations may require in particular awards
the exclusion or modification of them or the addition of other items.)
Overtime Payments.
Camping Allowances.
Travelling Allowances.
Disability Rates such as confined spaces and dirty work.
Car Allowances.
Meal Allowances.
5. The lists contained in clauses 3 and 4 do not purport to cover the whole field of matters
which may have to be considered for either inclusion or exclusion as to a particular award
…’72
[191] In the above statement the Commission was clearly expressing the view that the norm
in respect of annual leave payments was that:
while on annual leave an employee would be paid what they would have ordinarily
earned had they been working (including shift loadings); and
it was not the Commission’s intention to require employees who are already paying
an ‘annual leave bonus’ to pay both the bonus and the amount of annual leave
payment suggested by the Commission.
[192] The existing terms of the Joinery Award are inconsistent with the norm expressed by
the Commission in the 1971 Annual Leave Case in that they require the payment of both an
annual leave bonus (the 17.5 per cent loading) and the applicable shift rate.
[193] Of course in establishing the norm in respect of annual leave payments the
Commission was not setting an immutable test case standard in respect of this issue. It was
clearly envisaged that in individual awards special circumstances may require some departure
from the expressed norm. But there is nothing before us to suggest that there are special
circumstances pertaining to the Joinery Award which warrant some departure from the norm.
[194] In short, the existing terms in the Joinery Award are:
inconsistent with the norm in respect of annual leave payments;
out of step with the annual leave payment terms in other construction awards and in
modern awards generally; and
not justified on the basis of special circumstances pertaining to the Joinery Award.
[195] In these circumstances we are satisfied that the existing terms lack merit and are not
‘fair’, within the meaning of the modern awards objective. In arriving at that conclusion we
have taken into account the matters set out at s.134(1)(a) to (h), insofar as they are relevant.
We accept that some of the employees covered by the Joinery Award are ‘low paid’ within
the meaning of s.134(1)(a) and that the variation proposed by Ai Group will diminish the
capacity of those employees to meet their needs, though the impact will be limited as it will
only arise when the employees receive an annual leave payment. The variation proposed will
also reduce employment costs (s.134(1)(f)).
[2016] FWCFB 8463
44
[196] We propose to vary the Joinery Award in the manner proposed by Ai Group. We are
satisfied that the award term (as varied) is necessary to achieve the modern awards objective.
[197] For the same reasons we propose to vary the Food, Beverage and Tobacco
Manufacturing Award 2010 and the Electrical, Electronic and Communications Contracting
Award 2010 in the manner proposed by Ai Group and agreed by the other interested parties.
3. Next Steps
[198] For the reasons given:
1. We seek written submissions in relation to the provisional ‘payment of wages and
other amounts’ model term at paragraph [34] (also see paragraphs [44] and [48]),
including its treatment of accrual of payments. Submissions should be directed to the
concepts in and wording of the provisional model term.
2. We seek written submissions on the provisional view that there would be benefit
in either replacing the existing provision for payment in all modern awards with the
‘payment of wages and other amounts’ model term (once finalised), or alternatively
with a version of the model term appropriately adapted to the existing award payment
arrangements.
3. We seek written submissions on the provisional ‘payment on termination of
employment’ model term at paragraph [117], including its treatment of accrual of
payments. Once the model term has been settled a Statement will be issued setting out
the process for considering which modern awards are to be varied to insert the model
term. Interested parties will be given an opportunity to comment on whether
particular modern awards should be varied to insert the model term.
4. The written submissions referred to at points 1, 2 and 3 above are to be filed by
4 pm on Thursday 22 December 2016 and submissions in reply by 4 pm on
Thursday 2 February 2017, with liberty to apply. All submissions are to be sent to
amod@fwc.gov.au and will be published on the Commission’s website in the usual
way. The matter will be listed for an oral hearing on Wednesday 8 February 2017.
5. We will issue draft variation determinations in respect of the nine modern awards
which are the subject of the ABI application to remove the penalty for late payment of
wages in circumstances where wages are paid by EFT. The relevant awards are:
Cleaning Services Award 2010;
Hospitality Industry (General) Award 2010;
Plumbing and Fire Sprinklers Award 2010;
Professional Diving Industry (Industrial) Award 2010;
Professional Diving Industry (Recreational) Award 2010;
Racing Industry Ground Maintenance Award 2010;
Registered and Licensed Clubs Award 2010;
Silviculture Award 2010; and
Supported Employment Services Award 2010.
mailto:amod@fwc.gov.au
[2016] FWCFB 8463
45
6. We will issue draft variation determinations in respect of the three modern awards
which are the subject of the Ai Group application to address an alleged anomaly in the
annual leave clauses relating to provisions dealing with the payment of annual leave
and annual leave loading. The three modern awards are:
Electrical, Electronic and Communications Contracting Award 2010;
Food, Beverage and Tobacco Manufacturing Award 2010; and
Joinery and Building Trades Award 2010.
[199] The draft variation determinations referred to above will be issued shortly. Interested
parties will have 7 days to comment on the drafts. All comments are to be sent to
amod@fwc.gov.au and will be published on the Commission’s website in the usual way.
PRESIDENT
Appearances:
L Izzo for the Australian Chamber of Commerce and Industry, Australian Business Industrial
& NSW Business Chamber
M Adler for the Housing Industry Association
R Bhatt and S Smith for the Australian Industry Group
R Sostarko for the Master Builders Australia Limited
S Bull, for United Voice
R Walsh for The Australian Workers’ Union
W Tegg for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries
Union” known as the Australian Manufacturing Workers’ Union (AMWU)
W Carr for the Transport Workers’ Union of Australia
P Boncardo for the Construction, Forestry, Mining and Energy Union
A Thomas for the Construction, Forestry, Mining and Energy Union – Mining and Energy
Division
V Wiles for the Textile, Clothing and Footwear Union of Australia
G Marton for the Victorian Automobile Chamber of Commerce and the Motor Trades
Association
K Pearsall for the National Farmers’ Federation
T Evans for the Australian Hotels Association
Hearing details:
Sydney.
2016.
21 October.
mailto:amod@fwc.gov.au
[2016] FWCFB 8463
46
Printed by authority of the Commonwealth Government Printer
Price code J, PR587887
1 4 Yearly Review of Modern Awards – Annual Leave [2016] FWCFB 3177 at [135]-[140]
2 See s.599 of the FW Act
3 [2014] FWCFB 1788 at paras [19]–[24] (the Preliminary Jurisdictional Issues Decision)
4 [2016] FWCFB 4519
5 [2016] FWCFB 5254
6 [2016] FWCFB 5741
7 [2016] FWCFB 6401
8 [2016] FWCFB 7455
9 SDA submission 2 March 2015; Transcript 14 December 2015, PN 410
10 Clerks – Private Sector Award 2010; Educational Services (Schools) General Staff Award 2010; and Educational Services
(Teachers) Award 2010
11 Air Pilots Award 2010; Aircraft Cabin Crew Award 2010; Airline Operations - Ground Staff Award 2010; and Marine
Towage Award 2010
12 Clause 24.2 of the Waste Management Award 2010 provides that ‘[a]ll earnings, including overtime, must be paid within
three days of the end of the week in which they accrue.’
13 [2010] FWA 8218
14 Ibid at [9]. See further Murrihy v Betezy.com.au Pty Ltd [2013] FCA 908 at 142
15 See Murrihy v Betezy.com.au Pty Ltd [2013] FCA 908
16 In relation to payment for leave, see Canavan Building Pty Ltd [2014] FWCFB 3202 at [44]
17 Rofin Australia Pty Ltd v Newton (1997) 78 IR 78 at 81
18 See also ss.165(3), 166(5) and 286(5)
19 For example Transport (Cash in Transit) Award 2010, Storage Services and Wholesale Award 2010 and Security Services
Industry Award 2010
20 RCI correspondence dated 19 July 2016.
21 See the Waste Management Award 2010 at clause 24.3
22 See the Plumbing and Fire Sprinklers Award 2010 at clause 27.4
23 See the Nurses Award 2010 at clause 18.3
24 See the Horse and Greyhound Training Award 2010
25 Ai Group submission 20 September 2016 at pp 8 – 9
26 ABI & NSWBC submission 20 September at 6
27 CFMEU (Mining and Energy Division) submission 20 September 2016
28 [2016] FWCFB 7455
29 See for example Garrick & Mines v Mitsubishi Motors Australia Ltd [2014] SAIRC 38
30 [2015] FCAFC 20 at [214], also see [135] per Tracey, Gilmour, Jagot and Beach JJ. Also: Taylor & Hose Corp Pty Ltd and
Anor [2015] FCCA 1804 at [5]
31 D’Souza v Henry Schein Halas [2014] FWC 5864 at [29] – [30]; also see s.44(1) of the FW Act
32 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337
33 D’Arcy P, Gustafsson L, Lewis C and Wiltshire T (2012) “Labour Market Turnover and Mobility”, Reserve Bank of
Australia Bulletin December Quarter pp 1 – 12 at p 3
34 Birrell v Australian National Airlines Commission [1984] 9 IR 101
35 See generally GJ McCarry (1986), ‘Termination of Employment Contracts by Notice’, 60 ALJ 78, pp 78 – 86
36 ABI submission 20 September 2016 at para 6.2 (o) and (p)
[2016] FWCFB 8463
47
37 Information received from the Department of Social Services (this will be published on the Commission’s website shortly)
38 Guide to Social Security Law, 4.3.4.10–Application of the Income Maintenance Period (IMP)
http://guides.dss.gov.au/guide-social-security-law/4/3/4/10
39 AMWU submissions 13 October 2016 at [34]
40 Section 127 provides that the Regulations may permit modern awards to include terms that would or might otherwise be
contrary to Part 2-2 or s.55, or prohibit modern awards from including terms that would or might otherwise be permitted
by Part 2-2 or s.55. No such regulations have been made.
41 Maritime Union of Australia v Maersk Crewing Australia [2016] FWCFB 1894 at [21]
42 See Re Armacell Australia Pty Ltd (2010) 202 IR 38 at [18] – [19]; Re Hull-Moody Finishes Pty Ltd [2011] FWAFB 6709
at [26]; and Re Canavan Building Pty Ltd [2014] FWCFB 3202 at [36]; and 4 yearly review of modern awards – Alleged
NES Inconsistencies [2015] FWCFB 3023 at [37]
43 See for example, Stewart A, Forsyth A, Irving M, Johnstone R and McCrystal S, Creighton and Stewart’s Labour Law, 6th
Edition, The Federation Press, 2016 at [15.58]- [15.59]; Sappideen C, O’Grady P, Riley J, Warburton G, Smith B,
Macken’s Law of Employment, 7th Edition, Lawbook Co, 2011, at [11.20] – [11.60]; Irving M, The Contract of
Employment, LexisNexis Butterworths Australia, 2012, at [9.26] – [9.34].
44 Stewart et al note 43 above at [15.58]
45 Stewart et al note 43above observe at [15.58] that an employee who is not entitled to wages for a broken pay period, may
be able to claim damages or reasonable remuneration for restitution if the employee was wrongfully prevented by the
employer from completing the pay period.
46 See Stewart et al note 43 above at [15.58] and Sappideen et al note 43 above at [11.40]
47 See Irving note 43 above at [9.27]-[928] and Sappideen et al note 43 above at [11.30] – [11.40]. See further Re Waterside
Workers Awards (1957) 1 FLR 119 and State Superannuation Board (NSW) & Anor v Criminale & Ors (1988) 26 IR 13.
48 MBA submissions (Building Joinery) 2 March 2015
49 MA000020 at clause 31.5
50 MA000029 at clause 26.3
51 [2015] FWCFB 1549
52 Ibid at [29]
53 [2015] FWCFB 2856
54 Ibid at [100] and [102]
55 Ibid at [119]
56 Ibid at [127]
57 Ibid at [124]
58 Ibid at [49] and [2015] FWCFB 7236 at PNS [229] – [234]
59 [1947] SASR 162; also see Re Darling Harbour Development Project Industrial Agreement (1988) 27 IR 375.
60 United Voice submission 19 October 2016 at [11] to [16]
61 4 yearly review of modern awards – Annual Leave [2016] FWCFB 6836 at [59] – [61]
62 [2015] FWCFB 7236 at [78]
63 [2014] FWC 32
64 (2009) 180 IR 124 at [54]
65 CFEMU (Construction and General Division) reply submission 14 October 2016 at [62]
66 CFMEU reply submission 14 October 2016
67 [2014] FWCFB 1788 at [23]
68 (1972) 147 CAR 447
69 (1972) 144 CAR 5289
70 Ibid at paragraph 534
71 Ibid at paragraph 532
72 Ibid at paragraphs 544 and 545. We have only set out that part of the Commission’s “Announcement” which is relevant to
the matter before us.
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014274-sub-MBA-020315.pdf
http://www.fwc.gov.au/documents/sites/awardsmodernfouryr/AM2014260-sub-MBA-020315.pdf
48
ATTACHMENT A—Submissions received
ABI & NSW Business Chamber Submission 27 June 2016
Master Builders Australia – Submission 30 June 2016
Ai Group – Correspondence 30 June 2016
Master Builders Australia – Correspondence 11 July 2016
SDA – Submission and draft determinations 19 July 2016
Ai Group – Correspondence and draft determinations 19 July 2016
Master Builders Australia – Submission and draft
determinations
20 July 2016
SDA – Submission 10 August 2016
Ai Group – Correspondence and draft determinations 24 August 2016
AMWU – Correspondence 24 August 2016
ABI & NSW Business Chamber – Submission – supporting
evidence
20 September 2016
Australian Hotels Association – Submission 20 September 2016
Ai Group – Correspondence and draft determinations 26 April 2016
Ai Group – Submission 20 September 2016
CFMEU – Mining and Energy Division – Submission – draft
determination
20 September 2016
Housing Industry Association – Submission 20 September 2016
Master Builders Australia – Submission 20 September 2016
National Farmers’ Federation – Submission – draft
determination
20 September 2016
SDA– Report back, agreed payment of wages terms 16 September 2016
Ai Group – Submission in reply (dated 13 August 2016) 13 October 2016
SDA– Submission in reply 13 October 2016
Coal Mining Industry Employer Group – Submission in reply 13 October 2016
United Voice – Submission in reply 13 October 2016
CFMEU – Mining and Energy Division – Submission in reply 13 October 2016
AMWU – Submission in reply 13 October 2016
CFMEU – Forestry, Furnishing, Building Products &
Manufacturing Division – Submission in reply
14 October 2016
TCFUA – Submission in reply 14 October 2016
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-tcfua-141016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-cfmeu-forestry-131016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-amwu-131016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-cfmeu-131016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-uv-131016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-cmieg-131016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-sda-131016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-aig-131016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-corr-sda-160916.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-nff-200916.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-nff-200916.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-mba-200916.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-hia-200916.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-cfmeu-200916.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-cfmeu-200916.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-aig-200916.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-corranddraftdeterm-aigroup-260416.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-aha-200916.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-abi-200916.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-abi-200916.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-corr-amwu-240816.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-corr-aig-240816.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-subs-sda-100816.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-mba-200716.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-mba-200716.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-corr-abi-190716.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-draft-det-sda-190716.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-mba-110716.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/common/am20168-corr-aig-300616.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/common/am20168-corr-mba-300616.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/common/am20168-sub-abiandanor-270616.pdf
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CFMEU – Construction & General Division – Submission in
reply
14 October 2016
AWU – Submission in reply 17 October 2016
Ai Group – correspondence re: timetable 17 October 2016
TWU – submission in reply 17 October 2016
National Road Transport Association (NatRoad) – Submission 17 October 2016
CFMEU – Mining and Energy Division – Submission in reply
Black Coal
18 October 2016
NFF – Submission in reply 18 October 2016
Australian Meat Industry Council – Submission in reply 18 October 2016
ABI & NSWBC – submission in reply 19 October 2016
Master Builders Australia – submission in reply 19 October 2016
United Voice – submission-additional claims 19 October 2016
ABI & NSWBC – submission in reply - additional 19 October 2016
CMIEG – submission in reply 19 October 2016
Ai Group – Submission in reply 19 October 2016
HIA– Submissions in reply to the CFMEU subs of 14/10 20 October 2016
Australian Hotels Association – submission- statement
questions
20 October 2016
Master Builders Association – submission- statement questions 21 October 2016
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-mba-211016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-aha-201016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-aha-201016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-reply-sub-hia-201016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-aig-191016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-cmieg-191016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-reply-sub-abianor-191016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-uv-191016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-reply-sub-mba-181016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-reply-sub-abi-181016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-amic-181016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-nff-181016.pdfhttps:/www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-nff-181016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-cfmeu-181016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-cfmeu-181016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-natroad-171016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-twu-171016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-corr-aig-171016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-awu-171016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-cfmeu-cgd-141016.pdf
https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/am20168-sub-cfmeu-cgd-141016.pdf
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ATTACHMENT B—Payment of wages 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.
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000021/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000021/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000020/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000020/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000020/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000020/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000001/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000001/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000001/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000054/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000054/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000060/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000060/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000018/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000018/default.htm
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Award Method of
payment
Provision for
payment on
termination
Timeframe for payment on
termination
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]
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.
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000008/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000008/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000008/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000026/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000026/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000026/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000073/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000073/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000073/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000025/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000025/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000025/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000025/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000096/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000096/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000096/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000120/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000120/default.htm
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Award Method of
payment
Provision for
payment on
termination
Timeframe for payment on
termination
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
Clause 19.4 Notwithstanding anything
contained in this clause, the
employer must pay to an employee
who leaves or is dismissed all
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000063/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000063/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000063/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000034/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000034/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000033/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000033/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000032/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000032/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000059/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000059/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000030/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000030/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000030/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000010/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000010/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000010/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000010/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000028/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000028/default.htm
[2016] FWCFB 8463
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Award Method of
payment
Provision for
payment on
termination
Timeframe for payment on
termination
transfer to a bank
account nominated by
an employee
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.
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000119/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000119/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000119/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000109/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000109/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000109/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000108/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000108/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000108/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000036/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000036/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000036/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000069/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000069/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000035/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000035/default.htm
[2016] FWCFB 8463
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Award Method of
payment
Provision for
payment on
termination
Timeframe for payment on
termination
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.
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000084/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000084/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000084/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000040/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000040/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000068/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000068/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000038/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000038/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000038/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000039/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000039/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000039/default.htm
[2016] FWCFB 8463
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Award Method of
payment
Provision for
payment on
termination
Timeframe for payment on
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.
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000071/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000103/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000103/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000103/default.htm
[2016] FWCFB 8463
56
Award Method of
payment
Provision for
payment on
termination
Timeframe for payment on
termination
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.
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000090/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000090/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000043/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000043/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000089/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000089/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000089/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000089/default.htm
[2016] FWCFB 8463
57
ATTACHMENT C—Awards that contain penalty for late payment of wages provisions
Award
code
Award Rate of penalty
payment for
late payment of
wages
MA000060 Aluminium Industry Award 2010 Overtime
MA000054 Asphalt Industry Award 2010 Overtime
MA000020 Building and Construction General On-site Award 2010* Overtime
MA000022 Cleaning Services Award 2010 Ordinary rates
MA000073 Food, Beverage and Tobacco Manufacturing Award 2010 Overtime
MA000026 Graphic Arts, Printing and Publishing Award 2010 Time and a half
MA000009 Hospitality Industry (General) Award 2010 Overtime
MA000029 Joinery and Building Trades Award 2010* Overtime
MA000010 Manufacturing and Associated Industries and Occupations
Award 2010
Overtime
MA000032 Mobile Crane Hiring Award 2010 Overtime
MA000069 Pharmaceutical Industry Award 2010 Overtime
MA000036 Plumbing and Fire Sprinklers Award 2010 Overtime
MA000108 Professional Diving Industry (Industrial) Award 2010 Overtime
MA000109 Professional Diving Industry (Recreational) Award 2010 Overtime
MA000014 Racing Industry Ground Maintenance Award 2010 3.9% weekly
standard rate per
day
MA000058 Registered and Licensed Clubs Award 2010 Overtime
MA000068 Seafood Processing Award 2010 Overtime
MA000040 Silviculture Award 2010 Ordinary rates
MA000103 Supported Employment Services Award 2010 Ordinary rates
MA000071 Timber Industry Award 2010^ Overtime
* Awards subject to applications to remove penalty
^ see also Group 1C–E decision [2015] FWCFB 7236 at paras 229–234
https://www.fwc.gov.au/documents/decisionssigned/html/2015FWCFB7236.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000071/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000103/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/ma000040/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000068/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000058/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000014/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000109/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000108/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000036/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000069/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/ma000032/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/ma000010/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000029/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000009/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000026/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000073/default.htmhttps:/www.fwc.gov.au/documents/documents/modern_awards/award/MA000120/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000022/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000020/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/MA000054/default.htm
https://www.fwc.gov.au/documents/documents/modern_awards/award/ma000060/default.htm
