Annual leave loading on termination in the Vehicle Award
Employees get paid an annual leave loading when their employment ends.
They get the loading even though the Vehicle Award says that it’s not paid.
This means that when employment ends, employees get paid for their accumulated annual leave and one of the following:
- day workers get a 17.5% annual leave loading
- shift workers get the higher of the annual leave loading or their shift penalty rate.
Why is annual leave loading paid on termination?
The amount an employee has to be paid for annual leave when their employment ends must be the same as what the employee would be paid if they were on annual leave.
This means that if the employee is paid a loading while taking annual leave, that loading will also be paid when the employment ends.
Fair Work Act 2009 - section 90(2) says that when employment ends, employees must get paid what they would've been paid had they taken the period of leave.
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