Get the Paperwork Right

That word “specificity” has reared its head again, with a magistrate finding the lack of it in a contract has probably brought an employer undone. And in so finding, the court has allowed a claim for underpayments to proceed to trial.

The company had engaged an administrator on a salary which, it said, was intended to include extras such as overtime. The court established that the clerical award would apply to the work.  But the employer had failed to specify the terms of any award that were to be discarded in favour of the annualised salary. Worse, the relevant award itself requires that level of detail for an annualised salary arrangement to comply.

The company argued that since there was a contract of employment which included an annualised salary which was to be inclusive of any award entitlement that the administrator may have had, then there was no case to answer. The employer indicated that any claim for an overtime entitlement would be offset by early finishes and late starts on other occasions. This, it argued, was the intent of the broad-based exclusion from award entitlements contained in the employment contract.

But the magistrate made the point that the inadequacy of detail about which award provisions were to be over-ridden by the additional salary rendered the employer’s argument moot. It was impossible to determine, from the vague, generalised words of the contract, precisely what entitlements were to be foregone for the higher salary. He went further and pointed out that some award entitlements could not be included in the salary because they were not itemised in the list of award terms which could be offset by the annualised salary.

The court will now decide if the annualised salary is adequate to cover the various award entitlements the employee is claiming.

It is trite but true, that with employment contracts, it is wisest to “get it in writing”, and in as much detail as will stand up to scrutiny later. The lesson this employer will learn the hard way is that it is a lot cheaper, and there are a lot less sleepless nights to be had, when the specifics of what a salary is to cover, are properly and clearly expressed in writing.

Simone Jade Stewart v Next Residential Pty Ltd [2016] WAIRC 00756 (16 September 2016)

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