Typically, when an employer is making employee terminations, it is undertaken within the next pay cycle. However, a recent decision in Jewell v Magnium Australia Pty Ltd (Jewell Case) highlighted the risk employers take in making delayed termination payments.
Employees’ final pay typically consists of:
wages owed;
accrued but untaken annual leave; and
dependant on the circumstances may include:
- payment in lieu of notice; and/or
- redundancy pay; or
- accrued or pro rata leave.
The employer in the Jewell Case paid annual leave and notice to the employee 3 months after the termination date. When considered by the court it issued a penalty against Jewell totalling $18,600 due to the late payment, demonstrating the willingness of the courts to impose sanctions to late payment of employee entitlements.
Employers should:
review pay roll systems to ensure the ability to accommodate “out of cycle” payroll payments;
develop standard process termination day payroll processing; and
if unsure, seek advice
Jewell v Magnium Australia Pty ltd (No 2) [2025] FedcFamC2G 676
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Please note this blog is general in nature and for information purposes only and should not be relied on for legal advice. If you require advice regarding the information in this email please contact us so we may provide advice specific to your needs and circumstances.
