Enterprise agreements and modern awards provide for minimum entitlements to wages and conditions

Enterprise agreements and modern awards provide for minimum entitlements to wages and conditions of employment for people who work in the particular industry or sector to which the award applies. There are hundreds of different awards and agreements, although if you are not covered by one you are still protected by the National Employments Standard minimum wage.

Your contract of employment operates in addition to any award or agreement you are covered by, and your contract cannot purport to entitle you to less than what is provided for by the award or agreement. It is important that employees check to see if they are covered by an award or agreement, and what it provides for, particularly in light of recent cases of deliberate underpayment, or wage theft, by employers.

In addition to providing for minimum rates of pay, you may also be eligible to other important entitlements and allowances, depending on your industry. Common examples can include arrangements as to meal time breaks, rates of overtime payment, and additional payments to compensate you for working in specific conditions or at unusual times.

Determining the correct wage is often not a simple as many would think. Assessing the required payment under an award and enterprise agreement often includes complex analysis, including the assessment of classifications and job roles, as well as the applicability of overtime rates of pay and allowances.

Further, employers have obligations under the Fair Work Act to pay employees in full and at least monthly. Failure to do so may mean you are entitled to bring an action against your employer.

The entitlement to superannuation, and recovery of superannuation is a very complex area of law

Superannuation under a contract of employment

Many written contracts of employment contain terms as to superannuation and confer an entitlement under the contract to be paid superannuation.  This entitlement is independent of the entitlement under the Superannuation Guarantee.

Where there is a contractual entitlement, unpaid superannuation can be recovered in a claim for breach of contract in the same way as a claim for unpaid wages.

Superannuation under award or enterprise agreement

Some employees are covered by an award or enterprise agreement that imposes an obligation on the employer to pay superannuation.  This entitlement is independent of the entitlement under the Superannuation Guarantee.

Where there is an award or agreement entitlement, unpaid superannuation can be recovered in a claim under the industrial instrument in the same way as a claim for unpaid wages.

Superannuation under Commonwealth law

Most people are aware of the guarantee under Commonwealth law in relation to superannuation.  Superannuation Guarantee Legislation effectively requires employers to pay an additional 9.5% to the income of employees earning more than $450 per month to a superannuation fund chosen by the employee.

The Commonwealth law empowers the Australian Tax Office (the ATO) to bring proceedings to recover underpayments of superannuation.

This means that if you have no entitlement to superannuation under your contract of employment, award, or enterprise agreement (as discussed above), you cannot bring a claim against your employer but instead must rely on the ATO to pursue it on your behalf.

The ATO can be notified by calling 131 020. The ATO will investigate and recover your unpaid superannuation, along with interest and penalties.

The ATO will only collect unpaid super, and not any insurance benefits attached to the policy. If your employer has failed to make superannuation contributions on your behalf, and you injured yourself or became ill  and therefore were not covered, you may be able to claim for your loss in this regard.

Commissions are earned based on performance and may be difficult to determine

Employees who engage in sales or other work where there is a strong correlation between income to the employer and work by the employee may derive a significant portion of their income from commission structures, and other performance based pay structures. An example of these employees are doctors in medical centres, lawyers and accountants.

Disputes often arise as to the amounts payable. Such amounts can be both significant in quantum and difficult to determine.  The commission can often relate for work that has been completed some time earlier.  Common issues include:

• the capacity of the employer to unilaterally change the commission structure;
• how clients or sales should be treated where work has been done by multiple employees; and
• what occurs when the employment ends.

Bonuses are an increasing common element of employment packages

Many employees are entitled to bonuses. In many sectors, particularly finance and professional services, the bonus represents a significant element of the total remuneration.

Whether an employee has a legally enforceable  entitlement to a bonus is often complex.  A common situation is an entitlement to be considered for a bonus, but with no entitlement as to the amount of the bonus.  Another common scenario is for the employee to have an entitlement under the employer’s bonus or STI policy, but where the employer as an unfettered discretion to change the policy (including by reducing its value to nothing).

However, even where there is a contractual provisions confer a substantial discretion on the employer, the employer’s options  may be limited.  For example, the employer may have made pre-employment representations in connection with a bonus that are actionable under the Australian Consumer Law, or the contractual discretion may be to vary the bonus scheme from year to year, but  an obligation to comply with a bonus scheme the employer had in place.

The law provides protections for employees who have been unknowingly overpaid

Being paid more than you are entitled to under your employment contract or the relevant industry award is a fairly common error. This can occur where an employer is mistaken about the minimum amount an employee must be paid or simply because an error is made during payroll.

The law provides important protections for employees who have been unknowingly overpaid. Importantly, employers are not entitled to deduct money from an employee’s pay to recoup the overpaid amount without first getting their consent.

Ideally, an employee and and their employer should reach an agreement, in writing, which establishes the amount of money that has been overpaid, the way repayments will be made and how often they are to be paid. The law requires that the arrangement for repayment must be reasonable and that the agreement be genuinely entered into by the employee, for example without threats of termination, etc. by the employer. A common method of repayment is for the employee to agree to a small amount being regularly deducted from their pay, but other arrangements are possible.

If an agreement between the employer and the employee cannot be reached it is important to get legal advice. If necessary, overpayment disputes can be resolved in court but this route can be time-consuming and expensive.

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