Protected industrial action—strike pay

If an employee takes part in protected industrial action, which is not a partial work ban their employer must deduct money from their pay. The employer must deduct the time the employee was involved in the action from their pay. For example, if an employee is on strike for two hours, they will lose two hours’ pay.

A partial work ban is industrial action that is not a failure or refusal by an employee to attend for work, a failure or refusal by an employee who attends for work to perform any work at all or an overtime ban. Special rules apply when employees engage in industrial action which is a partial work ban. The obligation to deduct money from an employee’s pay does not apply in relation to a period of industrial action which is an overtime ban unless the employee was requested to work the period of overtime and refused to do so, and they were required to do so under a modern award, an enterprise agreement or their contract of employment.

Unprotected industrial action—strike pay

If an employee takes part in unprotected industrial action, their employer must also deduct money from their pay. When the action is unprotected, the employer is required to deduct a minimum of four hours from the employee’s pay—regardless of how long the action went for. For example, if the employee was on strike for one hour, their employer must deduct four hours from the employee’s pay.

The obligation to deduct money from an employee’s pay does not apply in relation to a period of industrial action which is an overtime ban unless the employee was requested to work the period of overtime and refused to do so, and they were required to do so under a modern award, an enterprise agreement or their contract of employment.

Penalties

Under the FW Act, the following applies:

  • Employers may be subject to legal action and penalties for failing to withhold pay from employees who engaged in the industrial action.
  • Employees may not ask for, or accept, payment for any period during which they took industrial action that the employer is not entitled to pay them for.
  • An employee or union must not request employees to be paid for a period of industrial action (whether protected or unprotected). Penalties may apply if they do.

Example: Strike pay

Riko is an employer operating as a subcontractor on a building site. Some of her employees take unprotected industrial action and stop work for three hours one day.

Riko wonders whether she should deduct the time from her employees’ pay.

If her employees have participated in unprotected industrial action, Riko must deduct a minimum of four hours from their pay regardless of how long the action went for, and if the action lasted longer than 4 hours she must deduct pay for the entire period of the action.  If she fails to deduct this pay, she may be subject to legal action and penalties.