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Summary dismissal: what monies are due?

Are they entitled to any period of notice or payment of accrued annual leave?
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Summary dismissal: what monies are due?

Summary dismissal: what monies are due?

27 April 2021

If an employee is summarily dismissed, are they entitled to any period of notice or payment of accrued annual leave?
                                                                      
Q Our company recently terminated an employee who was caught stealing company property on a large scale. The police were called and the employee has been charged with theft. After an investigation by management, the employee was summarily dismissed.

The employee has subsequently approached the company regarding any monies payable to them in relation to their employment. The employee was employed for about three years. Our company has an enterprise agreement which states an employee is to be paid their accrued annual leave on termination, other than for serious misconduct. The notice of termination provisions of the agreement are silent on what notice, if any, an employee is entitled to receive if dismissed due to serious misconduct. Because of the reason for the employee’s dismissal, is the employee entitled to any period of notice and is their accrued annual leave payable on summary dismissal?
 
A Under the FWAct (s123), an employer is not required to give the appropriate period of notice of termination under the Act where an employee is dismissed for serious misconduct. Although not specifically addressed by the Act, an employer would be required to pay up until the time of dismissal in this circumstance, unless there is a provision to the contrary in the applicable modern award or enterprise agreement.


Termination pay – annual leave

The employee would be entitled to receive payment for their accrued annual leave on termination of employment, despite the terms of the enterprise agreement. The FWAct (s90(2)) states that if, when employment ends, an employee has a period of untaken paid annual leave, the employer must pay the employee the amount that would have been paid to the employee had the employee taken that period of leave.

A term in an enterprise agreement that contravenes a provision of the NES, such as excluding payment of annual leave on termination, would have no effect.
 
The terms of the FWAct (s56) override the terms of a modern award or enterprise agreement where there is an inconsistency.

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