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Recent changes to termination of employment provisions in modern awards

October 03, 2019

It is important to keep on top of changes to Modern Awards which may affect the way you handle employment related matters. 

Recently there have been changes to some provisions in Modern Awards that relate to termination of employment, specifically the notice of termination to be provided by an employee, and the timing for the payment of wages on termination.

Notice of termination provided by an employee

Most Modern Awards such as the Building and Construction Onsite Award 2010 (Onsite Award), and Joinery Building Trades Award 2010 (Joinery Award) provide for notice of termination requirements.

Under these Awards where an employee resigns they must give the same amount of notice that an employer would need to provide, as per the National Employment Standard (NES):

Employees period of continuous service with employer Notice period
1 year or less 1 week
More than 1 year - 3 years 2 weeks
More than 3 years - 5 years 3 weeks
More than 5 years 4 weeks

What should I do if an employee does not give me notice?
Most Modern Awards prescribe a process for handling situations when an employee who resigns does not provide the correct amount of notice.  

A new provision under the Onsite Award (effective 30 August 2019) states:

  • If an employee who is at least 18 years old does not give the period of notice required, then the employer may deduct from wages due to the employee under their award an amount that is no more than one week’s wages for the employee;
  • If the employer has agreed to a shorter period of notice than that required then no deduction can be made; and
  • Any deduction must not be unreasonable in the circumstances.

Deduction can only be from ‘wages’ owed, not from other amounts due at termination (like accrued annual, long service leave, or redundancy payment).

Timing of payment of wages on termination

Modern Awards usually will state the timing for payment of an employee’s entitlements on termination of their employment. 

A new provision under the Joinery Award (effective 9 August 2019) states that the employer must pay an employee no later than 7 days after the day on which the employee’s employment terminates:

  • the employee’s wages for any complete or incomplete pay period up to the end of the day of termination; and
  • all other amounts that are due to the employee under the award and the NES.

It is important to check your employee’s relevant award for requirements for notice of termination by an employee, or timing for the payment of wages, as each Modern Award generally provides for different terms and conditions. If you have any questions please contact your HIA Workplace Adviser on 1300 650 620.