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A recent decision serves as an important reminder that termination entitlements must be paid on an employee's last day, and not in an employer's next pay cycle, lawyers warn.

Late payments have historically been considered a "technical breach" of the Fair Work Act, and are not usually the subject of civil penalties, according to Ashurst partner Jennie Mansfield and senior associate Heidi Kornman.

However, the Federal Circuit Court recently fined an employer more than $18k for its delay in paying out a sacked employee's entitlements. This shows courts are "strictly enforcing" payment timeframes, regardless of the employer's intentions, the lawyers say.

On 21 April 2023, Magnium Australia dismissed the employee with immediate effect. Its chief financial officer said he wasn't entitled to any redundancy pay, as it was a "small business employer", but that he would be paid two weeks' notice and any accrued annual leave...