Tuesday, 8 November 2016

Glenn Dukers Advice on Key Points to Consider When Making an Employee Termination Payment

Employees are entitled to a termination pay when their position is made redundant. This, essentially, is the monetary rights that are legally due to them. For instance, they may be entitled to pay in lieu of notice or severance pay, and they will be entitled to being paid out the annual leave that they have accrued.

As an employer, you are legally required to pay your team members a termination payment when you dismiss them. This may be a confusing area for inexperienced managers, as there are a few aspects to review before you make the payment. Before finalising payment to a departing employee, you need to consider a few things in order to determine the right amount to pay.

Here are some key questions to consider:
  1. Are they entitled to a termination pay?
  2. What type of termination pay are they actually entitled to, e.g. notice pay, severance pay, etc.
  3. Will theybe continuing to work until the completion of their notice date?
  4. Are they entitled to severance pay?
  5. What are their annual leave and/or long service leave entitlements?
  6. Are there are any other payments required for the employee under:
    1. Their contract of employment?
    2. An enterprise agreement?
    3. A modern award?
  7. What is the tax payable?
  8. What tax exemptions apply for severance pay?
Once you have answered these questions, be sure to double-check your figures before finalising the payment. You may also choose to seek help from a financial adviser to check figures.

For more information or if you need advice regarding this matter, please do not hesitate to get in touch with lawyer at: http://www.glenndukersolicitor.com.au/

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