It is common practice for employers to pay annualised
salaries to employees where the salaries are intended to operate as
'all-inclusive rates' that satisfy all entitlements owed to
an employee under an applicable award.
However, in the preliminary hearing of the recent case of
Simone Jade Stewart v Next Residential Pty Ltd 
WAIRC 00756, the WA Industrial Magistrates Court has cleared the
path for an employee on an annualised salary to claim $29,000 in
unpaid overtime and lunch breaks following an employer's
failure to specify the applicable employee award in their
In this particular case, both parties conceded that the
'Clerks – Private Sector Award' governed the
employee's employment. The Award provides that an employer may
pay an annualised salary in satisfaction of the following employee
minimum weekly wages;
overtime and penalty rates; and
annual leave loading.
The relevant clause of the Award also states employers that
elect to pay employees an annualised salary must advise the
employees in writing of the applicable award and of the specific
award entitlements to be satisfied by payment of the annual
However, rather than defining the applicable award and
entitlements, the employment contract contained a catch all
provision stating that the annualised salary was 'inclusive of
any award provisions/entitlement that may be payable under an
The employer argued this term was sufficient to indicate that
the annualised salary was inclusive 'of any or all' of the
provisions set out and payable under the Award.
The Court ultimately rejected this approach, finding that the
broad term created uncertainty as to which award applied and which
provisions the salary intended to cover.
It was noted by the Court that specificity is crucial to
ensuring employees can verify their salary against their award
entitlements, and so they may confirm they are not suffering any
This decision serves as a warning for employers to avoid generic
wording in employment contracts for annualised salaries.
Additionally, employers must ensure provisions of employment
contracts clearly identify the applicable award and specify the
provisions of the award that are intended to be satisfied by
payment of an annual salary.
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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.
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