Termination Payment

Details

Final Pay

The employee’s normal pay for all work completed up to the time of leaving. The final pay is not paid as a result of the termination so it is not actually a termination payment.

Payment in Lieu of Notice

Payment made in lieu of giving the employee the required notice of termination (normally four weeks).

Unused Leave Entitlements

Payments for unused annual leave and long service leave. Several awards also provide for payment of some accrued sick leave entitlements on termination.

Superannuation

Normally Payroll does not handle superannuation payments. Lump-sum payments are made from a superannuation fund. These payments include the return of the employee’s own contributions. Employers do not make superannuation payments. Preserved superannuation contributions can be transferred to another complying superannuation fund or Approved Deposit Fund. Employee cannot be paid preserved superannuation contributions.

Contractual Termination Payments

Payments made to fixed-contract employees to end their contracts rather than complete the work.

Redundancy/Retrenchment Payments

Payments made to employees when their labour is no longer required, or the need for their services has lessened. For example, when an employer loses a major ongoing contract.

Invalidity Payments

Disability payments made when employment is terminated due to an employee’s physical or mental disability.

Unused Rostered Days Off (RDO)

Payment for accrued rostered days off that the employee has not taken yet.

Early Retirement

Payments made to encourage employees to retire early. These payments are often part of an employment package.

Golden Handshakes

Gratuity payments made to employees on termination in recognition of long-standing service, loyalty or particular achievements.

Golden Handcuffs

Payments made to employees with valuable knowledge and/or skills to prevent them from working in the geographical area or in the industry for a fixed period.