A decision by the Federal Circuit Court on 28 June 2013
highlights the often forgotten obligation of employers to give pay
slips to employees as required by the Fair Work Act 2009
(Cth) (Act) and the Fair Work Regulations
2009 (Cth) (Regulations).
In Lai v Symantec (Australia) Pty Limited, the Court was asked
to determine whether an employee's employment had been
terminated for a prohibited reason when she was made redundant
whilst on maternity leave. This would have been in breach of the
general protections (adverse action) provisions in the Act.
Although the Court dismissed the adverse action claim brought by
the employee, the Court subsequently found that the employer had
breached section 536 of the Act which requires an employer to
"give a payslip to each of its employees within
one working day of paying an amount to the employee in
relation to the performance of work."
The employee's position was made redundant and her
employment was terminated effective on 2 March 2012. However, the
payslip, which included reference to her basic salary, was not
printed by the employer until 15 March 2012 and was not received by
the employee until 16 March 2012.
The Court rejected the employer's argument that as the
payment was related to redundancy, the pay advice didn't cover
a payment "in relation to the performance of
work". The Court took this view because the pay slip
included a reference to "basic salary".
As the Act required the employer to provide a payslip no later
than 3 March 2012, the employer had breached the Act and was liable
for a civil penalty of up to $16,500 (now $25,500). The Court
adjourned proceedings to allow the parties to address the question
of the amount of the penalty.
This undoubtedly left a sour taste in the employer's mouth,
after it was successful in defending the employee's primary
Lessons for employers
Employers must ensure that their employees receive a pay slip
compliant with the Act and Regulations within one working day of
paying an amount to the employee, which can be in electronic form,
such as by email, or in hard copy.
This obligation applies not only to the final payment to an
employee following their termination from employment, by way of
redundancy or any other reason, but also applies to each payment
made to an employee in relation to their performance of work
including their weekly, fortnightly or monthly wage or salary.
Often employers wait until their usual pay cycle to prepare and
provide a pay slip for an employee whose employment is terminated
before the usual payment date. However the Act is clear – a
pay slip must be given to employees within one working day of
What must be included in a pay slip?
Under the Regulations, a pay slip must specify the following
The employee's and the employer's names (including the
The period to which the pay slip relates
The date on which the payment to which the pay slip relates was
The gross and the net amounts of the payment
Any amount paid to the employee that is a bonus, loading,
allowance, penalty rate, incentive-based payment or other
separately identifiable entitlement.
If an amount is deducted from the gross amount of the payment,
the pay slip must also include the name, or the name and number, of
the fund or account into which the deduction was paid.
If the employee is paid at an hourly rate of pay, the pay slip
must also include:
The rate of pay for the employee's ordinary hours
The number of hours in that period for which the employee was
employed at that rate
The amount of the payment made at that rate
If the employee is paid at an annual rate of pay, the pay slip
must also include the rate as at the latest date to which the
Lastly, if the employer is required to make superannuation
contributions for the benefit of the employee (see our previous
update on this issue on
1 May 2013), the pay slip must also include:
The amount of each contribution that the employer made during
the period, and the name of any fund to which the contribution was
made (other than in relation to defined benefit schemes); or
The amount of contributions that the employer is liable to make
in relation to the period, and the name of any fund to which the
contributions will be made (other than in relation to defined
Failure to comply with these requirements will expose an
employer to a maximum civil penalty, for each breach, of now up to
$25,500. Where multiple breaches occur in relation to the same
issue, the penalty claimed can potentially be reduced on the basis
that the breaches arise out of the same course of conduct, meaning
that the maximum penalty is the maximum for one offence.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Treasurer Scott Morrison recently announced changes to a number of 2016 Budget superannuation contribution measures.
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