In Australia, an employer can withhold pay after termination only when there are specific circumstances and legal provisions that permit it.
The Fair Work Act 2009 and other relevant state and territory laws set out the rules and regulations regarding termination of employment and payment of final wages.
Notice period
When an employer terminates an employee, they may be required to provide notice or pay in lieu of notice, depending on the terms of the employment contract and the length of service. This is to ensure that the employee is compensated for the notice period.
Final pay
Employers are typically required to provide an employee's final pay, including any outstanding wages, accrued leave entitlements (such as annual leave and long service leave), and any other entitlements, on or shortly after the employee's last day of work.
Deductions
Employers can only deduct money from an employee's final pay if there is a lawful reason to do so, such as to recover an overpayment or if the employee has provided written consent for the deduction.
Unpaid wages
If an employer fails to pay an employee their final wages, the employee can seek recourse through the Fair Work Commission or the relevant state or territory authority responsible for workplace relations. Employers can face penalties for failing to meet their payment obligations.
Records
Employers are required to keep accurate records of employee pay and entitlements, including pay slips, and to make these records available to employees upon request.
It's important for both employers and employees to understand their rights and obligations under Australian employment law. If there is a dispute over unpaid wages or entitlements, it is advisable to seek legal advice or contact the Fair Work Ombudsman for assistance in resolving the matter.
Please note that employment laws and regulations can change over time, so it's essential to consult the latest information or legal counsel for specific and up-to-date guidance regarding employment issues in Australia.
If you want more information on the topic of termination, click the button below to read our article about employment separation certificates.
