The Commission has dismissed a claim for a denied contractual benefit as it found that there was no contractual agreement to vary an employee’s contract so that the employee would receive 2.5% of his employer’s profits in any year, in addition to his ordinary salary.

The employee worked for his employer from June 2013 to July 2018. At various times over the course of his employment, his employer paid him money over and above his ordinary salary. The employee said that the amounts were paid to him pursuant to an oral agreement, having contractual effect, made between him and the employer’s managing director in early 2015.

The employee said that the exact term of the agreement was that he would receive, in addition to his ordinary salary, a sum equating to 2.5% of the employer’s profit in any year, where a profit was made. The employee claimed that for the 2017-18 financial year, he was denied that contractual benefit.

Commissioner Matthews received evidence from the employee, as well as from the employer’s managing director, general manager and administration manager.

Matthews C found that there was no evidence that a contractual agreement had been made to vary the employee’s contract so that he would receive 2.5% of any profits made into the future.

Matthews C’s view was that the employer liked to give his employees some money from time to time. There was nothing predictable or formal about this and it was certainly not contractual in nature.

The claim was dismissed.

The decision can be read here.