The Fair Work Commission (“FWC”) and the courts are increasingly dealing with claims involving technical contraventions of the Fair Work Act 2009 (Cth) (“FW Act”), often alongside more substantive allegations. This is not necessarily because employers are breaching the FW Act more frequently, but because applicants now have access to tools that can readily identify technical breaches and incorporate them into broader claims.

A recent decision arising from a restructure, redundancy and subsequent general protections claim provides a useful illustration. While much of the commentary has focused on the personal penalties imposed on the chairman and CEO, another noteworthy aspect of the case was a payment in lieu of notice that was made four days after the employee’s employment ended.

Background

The employee’s primary claim was a general protections claim. However, she also alleged a technical contravention of the FW Act, arguing that her employer had failed to make the payment in lieu of notice before her employment ended.

Details of the technical breach

The FW Act requires an employer to provide written notice of termination before the termination takes effect. Where an employer elects to make a payment in lieu of notice, the payment must also be made before the employment ends. On appeal, the Court confirmed that a late payment does not invalidate the termination or delay its effective date until the payment is made. However, it does constitute a breach of the employer’s obligations under the FW Act.

The circumstances giving rise to this type of breach are often understandable. An employer may communicate a termination decision with immediate effect, intending the accompanying letter and payment to follow shortly afterwards. However, in practice, those steps often pass through multiple approval processes before being finalised and the FW Act does not accommodate this kind of administrative delay.

In this case, the technical contravention resulted in a penalty being payable by the employer. The penalty was towards the lower end of the available range because the breach arose from an inadvertent payroll error rather than deliberate conduct.

What this means for employers

Technical contraventions of this kind are not new. What has changed is the likelihood of them being identified and litigated. With the assistance of AI, employees are becoming more aware of technical compliance issues and, even where the amounts involved are modest, these breaches are increasingly being pleaded alongside more substantial claims such as general protections and unfair dismissal.

For employers, the lesson is clear: compliance with procedural requirements and legal obligations matters more than ever. In an environment where even minor errors are increasingly likely to be identified, it is important to get the fundamentals right.

The practical response

For employers, the response to technical points being raised is to make sure the basics of the termination process are consistent with the FW Act requirements. For payments in lieu of notice, this includes:

• confirming that payment is actually processed and received by the employee before their employment ends, not simply approved or initiated;
• building a short buffer into internal payroll timelines so that approvals are completed within the timeframe; and
• keeping a clear, dated record of when each step of a termination, including notice, final pay and payment in lieu, was actually completed, so this can be produced if challenged.