Post employment

Most industrial instruments and employment legislation require the employer to pay an employee all of their employment entitlements calculated to the date of termination of the contract of employment. However, there are some employment entitlements for which an employer may still be liable after the date of termination as they relate to work performed by the employee during the period of employment.

This commentary is based on writings by Paul Munro, IR consultant.
 
Most industrial instruments and employment legislation require the employer to pay an employee all of their employment entitlements calculated to the date of termination of the contract of employment.
 
However, there are some employment entitlements for which an employer may still be liable after the date of termination as they relate to work performed by the employee during the period of employment:
 
 
Commission/bonus payments
 
Because of the nature of certain occupations, such as sales representatives or real estate agents, there may be monies which have been earned by the employee but have not been verified until subsequent to the date of termination. Under these circumstances, whilst the contract of employment has been broken, its provisions may still require the employer to forward any monies earned under a commission arrangement.

A common provision in this regard is commission on orders obtained by the employee prior to the termination of employment continue to be paid to the employee for a period (eg. six months) from the cessation of employment.

A similar provision may appear in an industrial instrument where an employee has qualified for entitlement to a production or other type of bonus, which is payable subsequent to the termination of employment.

The provision would need to specifically exclude an employee from an entitlement to the bonus after termination of employment, otherwise the employee is entitled to any monies earned during the course of their employment.
In the absence of such qualification, the employee would be entitled to any payments earned during the course of their employment with the employer.

Deductions from termination pay
 
Where the employee fails to give proper notice to their employer upon the employee's resignation, the industrial instrument often provides that the employer is entitled to deduct the equivalent amount of wages in lieu of notice from all monies due to the employee on termination.
 
Where there are outstanding commission or bonus payments owed to an employee, these payments also form part of the pool of monies due on termination from which the employer may make the necessary deduction of monies.

Public holidays
 
An industrial instrument may make provision for the payment of a public holiday, or a group of public holidays, where the employment is terminated within a certain period of time prior to the holiday.
 
For example, some federal instruments provide that an employee terminated by the employer, other than for misconduct, within 14 days of Good Friday or Christmas Day is entitled to be paid for the group of holidays occurring at those times. However, in the absence of a specific provision in the relevant industrial instrument, an employee is not entitled to a public holiday which occurs after the date of termination of the employment.

Termination by employer in lieu of notice
 
In some jurisdictions, the employer may be required to calculate an employee's termination entitlements to a date subsequent to the date of termination where the employer does not provide the required period of notice to the employee, but pays in lieu thereof.
 
The date to which annual leave is calculated on termination in lieu of notice is generally calculated to the date of termination, however, in Western Australia and the ACT, for example, pro-rata annual leave may be required to be calculated to the end of the relevant notice period.
 
In South Australia and Tasmania, an employee may take their claim for a similar entitlement to their respective industrial tribunals.

Accident pay
 
Some industrial instruments provide for the payment of 'accident pay' to an employee who is absent on workers compensation. The relevant clause usually requires the employer to 'make-up' the difference between the level of workers compensation received by the employee from the employer's workers compensation insurer and the employee's actual rate of pay.
 
In addition, the clause will usually require the employer to continue to provide accident pay to the employee after the date of termination of employment where the termination was by the employer, except for reasons of serious or wilful misconduct.
 
Accident pay will continue to be paid for the maximum period (eg. 26, 39 or 52 weeks) prescribed by the clause or when the employee ceases to be entitled to workers compensation, whichever occurs first. The employee is usually required to provide evidence of workers compensation payments to continue to be eligible to receive accident pay after being terminated.

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