Annual Leave Not Paid Out on Termination? Recover It With a Letter of Demand

You left your job with weeks of unused annual leave on the books. Your final pay landed without it — or with a smaller amount than your accrual showed. Annual leave on termination is one of the few employment entitlements that is genuinely non-negotiable in Australia: it is a National Employment Standard, and there is essentially no lawful way for your employer to refuse to pay it.

The legal context — National Employment Standards

Section 90(2) of the Fair Work Act 2009 is unusually direct: when an employee’s employment ends, the employer must pay the employee for any untaken paid annual leave at their base rate of pay for the ordinary hours they would have worked. This is one of the eleven National Employment Standards (NES), and it cannot be contracted out of, traded away, or reduced. Loading on top of the base rate (typically 17.5%) may also apply if your modern award or enterprise agreement provides for it. The Fair Work Ombudsman regulates compliance.

Common employer defences and why they fail

• “You used more than you accrued.” Possible — but the employer must show a clear ledger and any overdrawn amount can only be recouped from final pay if you authorised it in writing under section 324.
• “Your contract said leave is forfeited.” Unenforceable. The NES overrides any contract clause that purports to reduce a statutory entitlement.
• “You were a casual.” True casuals don’t accrue annual leave. But many “casuals” are misclassified — particularly long-term workers with regular and systematic patterns of work — and may have an accrued leave entitlement they were never paid.
• “You quit without notice.” Irrelevant. Accrued leave is owed regardless of the manner of termination.

The Letter of Demand approach

A Letter of Demand for unpaid annual leave is straightforward to draft because the calculation is mechanical: hours accrued, hours used, balance, base rate, plus loading where applicable. It cites section 90(2) of the Fair Work Act and any relevant award or agreement clause, sets a 14-day deadline, and flags the FWO escalation.

What Claim Done delivers (flat fee)

The wizard captures your termination date, accrued and used leave hours, base rate, and award. Claim Done generates a Letter of Demand as a finished PDF, with the right Fair Work Act and NES citations and a clean calculation table — no lawyer, no waiting.

What to expect — and the Fair Work escalation

If your employer still refuses, lodge a Fair Work Ombudsman complaint — annual leave underpayment is a clear-cut breach of the NES and usually triggers a compliance notice. The small-claims division of the Federal Circuit and Family Court is the next step for larger amounts.