In this article we take a look at another typically underpaid entitlement …. Annual Leave Loading. Read on for the details of why million-dollar wage earners were found to be entitled to their annual leave loading payments and compensation ordered.
In this unbelievable case, the Macquarie Bank who was paying some of their advisers almost $1 million dollars per annum in remuneration was found to have underpaid a number of employees including their million-dollar wage earners.
The Federal Circuit Court found that Macquarie Bank had failed to comply with the provisions of the Banking, Finance and Insurance Award including non-payment of annual leave loading. Compensation amounts ranging between $11,000 and $43,000 was awarded to the advisers by the Court in October 2020 totalling around $800,000 in compensation. Now that’s a hefty bill, even for a large corporation like Macquarie Bank.
As Business 360 has mentioned in previous articles, reputational damage for being a “wage thief”, court costs, penalties and the accumulated amounts of back payments owing can be devastating.
Common errors with annual leave loading include:
- Failing to include provision for leave loading in an annualised salary.
- Failing to pay leave loading at a higher rate for employees who are shift workers where it is required by an award.
- Failing to pay leave loading on termination of employment when the employee has an entitlement.
- Failing to ensure that a “set-off” clause in an employment contract clearly includes its intention to set off the payment of leave loading. This was a key reason for Macquarie Bank being found to be in breach of complying with award entitlements.
If you need advice on understanding annual leave loading entitlements for your employees, click or scan the link below to book a confidential discussion with one of our team members.
For a copy of our
Annual Leave Loading Information Sheet email
info@business360pps.com.au or call 1300 287 360.
