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ARTICLE · 19 MAY 2015

Federal Court resolves debate about annual leave loading termination payments

Cooper Grace Ward
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Upon termination of employment, an employee is entitled to payment for accrued but unused annual leave and leave loading.

AustraliaEmployment and HR
Belinda Winter
Belinda Winter
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Federal Court resolves debate about annual leave loading termination payments

Since 2010 there has been ongoing confusion about whether annual leave loading (and other payments associated with annual leave) must be paid to employees upon termination of their employment.

The Fair Work Act 2009 (Cth) requires an employer to pay an employee during a period of paid annual leave at their base rate of pay for the ordinary hours, which would have been worked during the period.

The Act also requires that when paying out accrued annual leave upon termination of employment, the employer must pay the amount that would have been payable had the employee taken that period of leave during employment.

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