Western Australian Industrial Relations Commission

Salary cap relates the contract to be enforced

The Commission has determined it has jurisdiction to hear the substantive claim of the applicant who claimed he had been denied a benefit for payments of a bonus under a previous contract of employment with the respondent.

The applicant’s initial contract, which had commenced in 2013 (2013 Contract), was terminated by agreement in 2017. The applicant and respondent then entered into a second contract in 2017 (2017 Contract), which did not include a term for bonus payment.  

At the termination of the applicant’s employment in 2019, the respondent denied the applicant’s request for bonus payments he submitted were due under the 2013 Contract.

The respondent objected to the Commission hearing on the basis that the applicant’s salary exceeded the prescribed amount found in s 29AA(5) of the Industrial Relations Act 1979 (WA) (Act). Section 29AA provides that the Commission must not determine a contractual benefit claim if the employee’s salary exceeds the prescribed amount.

The respondent also referred to reg 5(2) of the Industrial Relations (General) Regulations 1997 (WA) (Regulations), which sets out the method for calculating an employee’s salary for the purposes of s 29AA(5) of the Act. It argued that on proper construction of the Act and the Regulations, the relevant salary rate for the purposes of this matter was the salary paid at the time of the applicant’s dismissal in 2019, which was the amount under the 2017 Contract and over the prescribed amount.

The applicant argued that the benefit he claimed he was entitled to was provided in the 2013 Contract. He asserted that the relevant salary rate to be considered was the rate paid under the 2013 Contract, which was under the prescribed amount found in s 29AA of the Act.

The Commission rejected the respondent’s contentions that the relevant salary to be considered was the salary at the time of the applicant’s dismissal. Commissioner Walkington found s29AA of the Act to mean it is the employee’s salary under the contract under which the benefit is claimed that is relevant.

The Commission found that as the relevant salary rate provided under the 2013 Contract was under the prescribed amount, it therefore has jurisdiction to hear the substantive claim.

The decision can be read here.

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