The recent Full Bench decision in Matura v Leica Geosystems Pty Ltd [2014] 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 threshold.

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 earnings.

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 the application.

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 the appeal.

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.

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