Fair Work Ombudsman v Extrados Solutions Pty Ltd

The Fair Work Ombudsman (FWO) brought proceedings against Extrados Solutions Pty Ltd (Extrados) in the Federal Circuit and Family Court of Australia. The dispute concerned Extrados' alleged contravention of the *Fair Work Act 2009* (Cth) by failing to pay an employee, Mr. David Smith, his accrued but untaken annual leave entitlements upon the termination of his employment. The FWO sought pecuniary penalties for these alleged breaches.

The central legal issue before the Court was whether Extrados had contravened section 90 of the *Fair Work Act*, which mandates the payment of accrued but untaken annual leave upon termination of employment. The Court was required to determine if Extrados' failure to make this payment constituted a contravention of the Act, and if so, what penalty was appropriate.

Judge Jarrett found that Extrados had indeed contravened section 90 of the *Fair Work Act*. The Court reasoned that the obligation to pay out accrued annual leave upon termination is a statutory requirement that cannot be contracted out of or waived by an employee. Extrados' argument that Mr. Smith had implicitly agreed to forgo this entitlement was rejected, as such an agreement would be void under section 340 of the Act. The Court emphasised the importance of ensuring employees receive their minimum entitlements.

Consequently, the Court ordered Extrados to pay a pecuniary penalty of $10,200 to the Commonwealth. Additionally, Extrados was ordered to pay Mr. Smith the sum of $1,788.90, representing the outstanding annual leave entitlement.