5

This rumour keeps coming up time and time again, (probably because I've worked in financial services where this may be more commonplace - I no longer do) but every now and then, I'll hear someone claim that it is unlawful for your employer to demand that your pay be deposited into an account held with a specific financial institution. There is no option for payment by cheque, but the account is provided free of account holding charges.

I've been told it may be related to third-line forcing, but I'm not sure this applies. Is there a legal basis for these claims?

Improve this question
2
  • So you are saying it is common practice in Australia that the employer stipulates that the salary is paid to an account at xyz bank and you are asking whether claims question the legality of this are true? To my German ears it sounds very strange that an employer might even think something like this is legal. I'm used to the following: employee provides a bank account at a bank of their choosing and employer has to pay salary to that account. Practices differ I guess.
    – quarague
    Nov 21, 2021 at 8:43
  • I wouldn't say commonplace, but it was done at least until the early 2010s. The scenario you describe is likely the most common, even here in Australia.
    – jimsug
    Feb 21, 2022 at 6:37

1 Answer 1

Reset to default
3

Section 324 of the Fair Work Act 2009 provides:

Method and frequency of payment

(1) An employer must pay an employee … in money by one, or a combination, of the methods referred to in subsection (2) …

(2) The methods are as follows:

(a) cash;

(b) cheque, money order, postal order or similar order, payable to the employee;

(c) the use of an electronic funds transfer system to credit an account held by the employee;

(d) a method authorised under a modern award or an enterprise agreement.

(3) Despite paragraph (1)(b), if a modern award or an enterprise agreement specifies a particular method by which the money must be paid, then the employer must pay the money by that method.

I am not aware of anything in the employment law that would prohibit an award or agreement from nominating the financial institution. It may fall foul of third-line forcing but not if, for example, the employer was a financial institution that required the use of its own accounts (no 3rd party so no third-line forcing).

Putting that aside, the employer has an obligation to pay; the choice of method lies with the employer. If it is too hard to pay electronically (e.g. employee hasn't given accounts details, the account is in the Caymen Islands etc.) then they must pay in cash or by cheque/money order.

Improve this answer
2
  • What is "third-line forcing " please? @jimsug or Dale M or anyone who knows.
    – David Siegel
    Nov 21, 2021 at 3:18
  • 2
    @DavidSiegel "Third line forcing occurs when a business will only supply goods or services, or give a particular price or discount on the condition that the purchaser buys goods or services from a particular third party": ACCC
    – molypot
    Nov 21, 2021 at 5:29

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .