The recent Full Bench decision in Matura v Leica Geosystems
Pty Ltd  FWCFB 6735 has considered what can be included
as an employee's "earnings" for the purposes of
determining whether the employee is above the high income
Under section 382(b)(iii) of the Fair Work Act 2009
(Cth), a person is able to make an unfair dismissal application if
at the time of their dismissal their annual rate of earnings was
less than the high income threshold. The current threshold
prescribed by the Fair Work Regulations (Cth) is
$133,000.00 per annum (which is indexed each year).
Under the Act, "earnings" is defined to include an
employee's wages as well as the agreed money value of
"non-monetary benefits". Non-monetary benefits are
entitlements an employee receives in return for the performance of
work, and for which a reasonable money value has been agreed by the
employer and the employee. The Regulations gives the Commission
some discretion in determining whether a non-monetary benefit
should be included in calculating the employee's annual
In the Matura case, Mr Matura filed an unfair dismissal
application against his former employer Leica Geosystems Pty Ltd
(Leica). Leica raised a jurisdictional objection
to the application, arguing that Mr Matura's annual rate of
earnings was greater than the high income threshold at the time.
Although Mr Matura's base salary was $129,000, Leica argued
that the cost of broadband internet, which the company paid for
pursuant to the employment agreement, should be included in
calculating Mr Matura's annual rate of earnings. It was noted
that Mr Matura had used the company paid internet and laptop for
non-work purposes while on a period of unpaid leave. At first
instance, the Commission agreed with Leica's argument and when
calculating the monetary value of the private internet use found
that this amount needed to be included in the calculation of Mr
Matura's annual rate of earnings. Subsequently Mr Matura's
annual earnings exceeded the threshold and the Commission dismissed
Mr Matura appealed the decision and the primary issue for the
Full Bench was whether Mr Matura had the benefit of access to
mobile internet broadband, and whether private broadband use (that
being a non-monetary benefit) should count towards the calculation
of his annual rate of earnings.
On appeal, the Full Bench held that non-monetary benefits, such
as the private broadband internet use, could not be included in the
calculations of an employee's annual rate of earnings in
instances where the benefit has not been agreed between the
employee and employer. The Full Bench looked at the contract of
employment between Mr Matura and Leica and found that while laptop
and broadband internet costs were payable in addition to his salary
and that such benefits were provided as 'equipment that was
essential to the performance of his job', the contract did not
provide for the use of the laptop and internet for non-work
purposes. It was subsequently held that the Commission's
discretion under the Regulations to include a non-monetary benefit
is not enlivened when a benefit is not received in accordance with
an agreement between the employer and employee.
The Full Bench held that no additional amount should be included
in calculating Mr Matura's annual rate of earnings, and granted
So where to from here? The Full Bench was clear to point out the
difference between a benefit that is paid as part of an
employee's salary and a benefit that is provided in addition to
the employee's salary or provided as a piece of equipment
supplied by the employer. When drafting, reviewing and negotiating
employment agreements, it is important to be mindful of this
distinction and ensure the provisions dealing with remuneration,
salary and benefits are clearly drafted to avoid any ambiguity.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Kemp Strang has received acknowledgements for the quality of
our work in the most recent editions of Chambers & Partners,
Best Lawyers and IFLR1000.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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