If you are an employer who has been employing people under Australian laws for many years you will definitely remember the days when employees were paid Leave Loading on termination in fairly limited circumstances.

So, fast forward to September 2018 and abandon those memories! S. 90(2) of the Fair Work Act 2009 seemed to sneak up on employers without anyone really noticing (like a lot of provisions in that legislation!). What the section says is that on termination the employee is entitled to be paid for any accrued untaken leave at the rate that would have been paid had the leave been taken. Folks, that means that if the Award or EBA covering the employee contained a provision for Annual Leave Loading then the loading has to be paid on termination. In case you doubted it the Federal Court reinforced it in February 2015 in a case brought by the CFMEU and it has been further reinforced in a couple of decisions since then.

It is surprising how many employers are, well, surprised by this. There seems to be a belief that on an across-the-board basis, if an employee has committed misconduct then no loading is payable on accrued leave paid on termination. That can only be the case if the Award in question has that provision. Most of them don’t but a handful do (e.g. the Security Services Industry Award) so you do need to check. Beyond that exception, the loading has to be paid regardless of behaviour.

Who said being an employer in Australia was easy? Not this writer.