Wardman v Macquarie Bank Ltd
[2023] FCAFC 13
•17 February 2023
FEDERAL COURT OF AUSTRALIA
Wardman v Macquarie Bank Limited [2023] FCAFC 13
Appeals from: Arundell & Ors v Macquarie Bank Limited [2020] FCCA 2720
Wardman & Ors v Macquarie Bank Limited and Briody & Ors v Macquarie Bank Limited [2020] FCCA 2725
Arundell v Macquarie Bank Limited (No 2) [2020] FCCA 3313
Wardman & Ors v Macquarie Bank Limited(No 2) [2020] FCCA 3317
Briody & Ors v Macquarie Bank (No 2) [2020] FCCA 3318
File numbers: NSD 88 of 2021
NSD 89 of 2021
NSD 90 of 2021
NSD 91 of 2021
NSD 92 of 2021Judgment of: BROMBERG, WHEELAHAN AND SNADEN JJ Date of judgment: 17 February 2023 Catchwords: INDUSTRIAL LAW — appeals and cross-appeals from five related decisions of the Federal Circuit Court of Australia in proceedings brought by former employees of Macquarie Bank Ltd (Bank) — where employees were remunerated by commission and a fixed monthly Basic Cost Responsibility (BCR) payment — where BCR included a fixed monthly payment to each employees — where employees claimed contraventions of the Banking, Finance and Insurance Award 2010 and the NES because they were remunerated by commission only and did not receive any wages or salary — where employees claimed BCR payments were advances on commission only — where primary judge found that Bank did not contravene NES or Award provisions regarding wages or salary, but failed to meet obligations regarding annual leave, public holidays and annual leave loading — whether monthly amounts paid to employees pursuant to contractual obligation to make BCR payments were effective to discharge concurrent statutory entitlements arising by operation of the Fair Work Act 2009 (Cth) — characterisation of agreed purpose of payments under relevant employment agreements — consequences, if any, of failure to engage annual salary or flexibility provisions in Award — whether primary judge erred in assessment of penalties — appeal allowed in part
CONTRACTS — STATUTORY INTERPRETATION — where several employees had entered into deeds of release with the Bank on termination of employment — whether deeds of release were effective to preclude employees from enforcing statutory rights under Fair Work Act — circumstances in which statutory entitlements may be bargained away in reaching a compromise of a dispute — consideration of Grant vJohn Grant & Sons Pty Ltd [1954] HCA 23; 91 CLR 112 and Felton v Mulligan [1971] HCA 39; 124 CLR 367
INTEREST — whether primary judge erred in ordering, without giving reasons, that interest should be calculated from commencement of proceedings rather than when amounts became due and payable
PRACTICE AND PROCEDURE — whether Bank was required, pursuant to Federal Circuit Court Rules 2001 (Cth) or the Federal Court Rules 2011 (Cth) to pay the amounts ordered within 14 days of the date of orders — where both parties conceded primary judge erred — error caused primary judge's assessment of penalty to miscarry
INDUSTRIAL LAW — whether primary judge made other sundry errors in the assessment of penalties
Legislation: Fair Work Act 2009 (Cth) ss 3, 16, 44, 45, 46, 90, 99, 106, 116, 323, 526, 536, 539, 545, 546, 547, 557, 570, 572
Legislation Act 2003 (Cth) s 15G(4)
Legislative Instruments Act 2003 (Cth) s 26
Workplace Relations Act 1996 (Cth)
Banking, Finance and Insurance Award 2010
Fair Work Regulations 2009 (Cth) regs 3.45, 3.46
Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) rr 1.06, 17.03, Schedule 1, Item 22
Federal Circuit Court Rules 2001 (Cth) rr 1.04, 1.05, 16.03, Part 19, Schedule 3, Part 2
Federal Court Rules 1979 (Cth) O 35, r 4
Federal Court Rules 2011 (Cth) rr 1.05, 39.02, 39.06, 41.08, Part 42.2
Anti-Discrimination Act 1977 (NSW) s 113
Workers Compensation Act 1926 (NSW)
Cases cited: Admiralty Commissioners v Valverda (Owners) [1938] AC 173
Amalgamated Collieries of WA Ltd v True [1938] HCA 19; (1938) 59 CLR 417
Ashenden v Stewarts & Lloyds (Australia) Ltd [1972] 2 NSWLR 484
Atkins Freight Services Pty Ltd v Fair Work Ombudsman [2017] FCA 1134
Australasian Meat Industry Employees Union v Dick Stone Pty Ltd [2022] FCA 512; (2022) 314 IR 441
Australia and New Zealand Banking Group Limited v Finance Sector Union of Australia [2001] FCA 1785; 111 IR 227
Australia Iron and Steel Pty Ltd v McAuley (Unreported, NSW Court of Appeal, 21 December 1984)
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3; 262 CLR 157
Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; 399 ALR 599
Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73; 262 FCR 243
Barilla v James (1964) 81 WN (Pt 1) (NSW) 45
Behan v Australian Telecommunications Corporation [1990] FCA 730; 26 FCR 337
Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; 117 FCR 424
Brooks v Burns Philp Trustee Co Ltd [1969] HCA 4; 121 CLR 432
Byrne v Australian Airlines Ltd [1995] HCA 24; 185 CLR 410
Chubb Insurance Company of Australia Ltd v Robinson [2016] FCAFC 17; 239 FCR 3007
Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24; 149 CLR 337
Commissioner of Taxation v Trustee for Michael Hayes Family Trust [2019] FCAFC 226; 273 FCR 567
Commonwealth v McCormack [1984] HCA 57; 155 CLR 273
Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) v Personnel Contracting Pty Ltd [2022] HCA 1; 398 ALR 404
Coulton v Holcombe [1986] HCA 33; 162 CLR 1
Director of Consumer Affairs Victoria v Gibson (No 3) [2017] FCA 1148
Discount Lounge Centre v Wakefield [2007] SAIRC 15
Dyer v Chrysanthou (No 4) [2022] FCA 51
Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12; 261 CLR 544
Electoral Commissioner of Australian Electoral Commission v Futter [2021] FCA 876
Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [2014] HCA 7; 251 CLR 640Electoral Commissioner of Australian Electoral Commission v Wharton (No 3) [2021] FCA 742
Felton v Mulligan [1971] HCA 39; 124 CLR 367
Goldman Sachs JBWere Services Pty Limited v Nikolich [2007] FCAFC 120; 163 FCR 62
Grant v John Grant & Sons Pty Ltd [1954] HCA 23; 91 CLR 112
James Turner Roofing Pty Ltd v Peters [2003] WASCA 28; 132 IR 122
Josephson v Walker [1914] HCA 68; 18 CLR 691
Kok Hoong v Leong Cheong Kweng Mines Ltd [1964] 1 AC 993
Kowalski v Trustee, Mitsubishi Motors Australia Limited Staff Superannuation Pty Ltd [2003] FCAFC 18
Liberty Mutual Insurance Company Australian Branch (t/as Liberty Specialty Markets) v Icon Co (NSW) Pty Ltd [2021] FCAFC 126; 396 ALR 193
Lieberman v Morris [1944] HCA 13; 69 CLR 69
Linkhill Pty Ltd v Director, Office of the Fair Work Building Industry Inspectorate [2015] FCAFC 99; (2015) 240 FCR 578
Lynch v Buckley Sawmills Pty Ltd (1984) 3 FCR 503 at 509
Maersk Crewing Australia Pty Ltd v CFMMEU [2021] FCAFC 231; 289 FCR 308
Meerkin & Apel v Rossett Pty Ltd (No 2) [1999] VSCA 10; 2 VR 31
Mondelez v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union (AMWU) [2019] FCAFC 138; 270 FCR 513
Morgan v State of Victoria [2008] VSCA 267; 22 VR 237
Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70; 168 FCR 383
Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; 256 CLR 104
Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; 218 CLR 451
Pacific Publications Pty Ltd v Cantlon (1983) 4 IR 415
Poletti v Ecob (No 2) [1989] FCA 779; 31 IR 321
Poulos v Waltons Stores (Interstate) Ltd [1986] FCA 159; 10 FCR 429
Qantas Airways Ltd v Gubbins (1992) 28 NSWLR 26
Ray v Radano [1967] AR (NSW) 471
Realestate.com.au Pty Ltd v Hardingham [2022] HCA 39
Re Oddy [1906] 1 Ch 93
Reardon Smith Line Ltd v Hansen-Tangen [1976] 1 WLR 989
Romero v Farstad Shipping (Indian Pacific) Pty Ltd [2014] FCAFC 177; 231 FCR 403
Roohizadegan v TechnologyOne Ltd (No 3) [2020] FCA 1571
Sans Souci Ltd v VRL Services Ltd [2012] UKPC 6
Stratton Finance Pty Ltd v Webb [2014] FCAFC 110; 314 ALR 166
Todd v Alterra at Lloyds Ltd [2016] FCAFC 15; 239 FCR 12
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165
Visscher v Giudice [2009] HCA 34; 239 CLR 361
Water Board v Moustakas [1988] HCA 12; 180 CLR 491
Whisprun v Dixon [2003] HCA 48; 200 ALR 447
WorkPac Pty Ltd v Rossato [2020] FCAFC 84; (2020) 278 FCR 179
Francis A.R. Bennion, Bennion on Statutory Interpretation (LexisNexis Butterworths, 5th ed., United Kingdom, 2008)
Halsbury’s Laws of England (Butterworths, 4th ed Reissue, London, 1998, Vol 9(1))
Jacob et al, The Supreme Court Practice 1982 (Sweet & Maxwell, Stevens & Sons, London, 1982, Vol 1)
Division: Fair Work Division Registry: New South Wales National Practice Area: Employment and Industrial Relations Number of paragraphs: 299 Date of last submissions: 20 August 2021 Date of hearing: 5-6 August 2021 Counsel for the Appellants in NSD 88 of 2021 and NSD 92 of 2021, and the Respondents in NSD 89 of 2021, NSD 90 of 2021 and NSD 91 of 2021 Ms K Nomchong SC and Mr B Britt Solicitors for the Appellants in NSD 88 of 2021 and NSD 92 of 2021, and the Respondents in NSD 89 of 2021, NSD 90 of 2021 and NSD 91 of 2021 Williamson Barwick Counsel for the Respondent in NSD 88 of 2021 and NSD 92 of 2021, and the Appellant in NSD 89 of 2021, NSD 90 of 2021 and NSD 91 of 2021 Mr A Moses SC with Mr B Rauf Solicitors for the Respondent in NSD 88 of 2021 and NSD 92 of 2021, and the Appellant in NSD 89 of 2021, NSD 90 of 2021 and NSD 91 of 2021 Kingston Reid ORDERS
NSD 88 of 2021 BETWEEN: JOHN WARDMAN
First Appellant
NICHOLAS SANDFORD
Second Appellant
DAVID DALL (and others named in the Schedule)
Third Appellant
AND: MACQUARIE BANK LIMITED ACN 008 583 542
Respondent
ORDER MADE BY:
BROMBERG, WHEELAHAN AND SNADEN JJ
DATE OF ORDER:
17 FEBRUARY 2023
THE COURT ORDERS THAT:
1.By 4.00pm on 3 March 2023, the practitioners for the parties are to confer and submit to the Chambers of the members of the Full Court via email proposed draft orders to give effect to these reasons.
2.If the parties are unable to agree on draft orders, then by 4.00pm on 3 March 2023, each party is to file and serve:
(a)proposed draft orders giving effect to these reasons; and
(b)written submissions, not exceeding three pages, in support of their respective proposed orders.
3. Subject to further order, the Court will consider the orders on the papers.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ORDERS
NSD 89 of 2021 BETWEEN: MACQUARIE BANK LIMITED ACN 008 583 542
Appellant
AND: JOHN WARDMAN
First Respondent
MATTHEW BOASE
Second Respondent
NICHOLAS SANDFORD (and others named in the Schedule)
Third Respondent
ORDER MADE BY:
BROMBERG, WHEELAHAN AND SNADEN JJ
DATE OF ORDER:
17 FEBRUARY 2023
THE COURT ORDERS THAT:
1.By 4.00pm on 3 March 2023, the practitioners for the parties are to confer and submit to the Chambers of the members of the Full Court via email proposed draft orders to give effect to these reasons.
2.If the parties are unable to agree on draft orders, then by 4.00pm on 3 March 2023, each party is to file and serve:
(a)proposed draft orders giving effect to these reasons; and
(b)written submissions, not exceeding three pages, in support of their respective proposed orders.
3.Subject to further order, the Court will consider the orders on the papers.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ORDERS
NSD 90 of 2021 BETWEEN: MACQUARIE BANK LIMITED ACN 008 583 542
Appellant
AND: PIERS ARUNDELL
First Respondent
HAMISH BLIEVERS
Second Respondent
DAVID BURGESS (and others named in the Schedule)
Third Respondent
ORDER MADE BY:
BROMBERG, WHEELAHAN AND SNADEN JJ
DATE OF ORDER:
17 FEBRUARY 2023
THE COURT ORDERS THAT:
1.By 4.00pm on 3 March 2023, the practitioners for the parties are to confer and submit to the Chambers of the members of the Full Court via email proposed draft orders to give effect to these reasons.
2.If the parties are unable to agree on draft orders, then by 4.00pm on 3 March 2023, each party is to file and serve:
(a)proposed draft orders giving effect to these reasons; and
(b)written submissions, not exceeding three pages, in support of their respective proposed orders.
3.Subject to further order, the Court will consider the orders on the papers.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ORDERS
NSD 91 of 2021 BETWEEN: MACQUARIE BANK LIMITED ACN 008 583 542
Appellant
AND: MICHAEL BRIODY
First Respondent
JOHN WARDMAN
Second Respondent
DAVID DALL (and others named in the Schedule)
Third Respondent
ORDER MADE BY:
BROMBERG, WHEELAHAN AND SNADEN JJ
DATE OF ORDER:
17 FEBRUARY 2023
THE COURT ORDERS THAT:
1.By 4.00pm on 3 March 2023, the practitioners for the parties are to confer and submit to the Chambers of the members of the Full Court via email proposed draft orders to give effect to these reasons.
2.If the parties are unable to agree on draft orders, then by 4.00pm on 3 March 2023, each party is to file and serve:
(a)proposed draft orders giving effect to these reasons; and
(b)written submissions, not exceeding three pages, in support of their respective proposed orders.
3.Subject to further order, the Court will consider the orders on the papers.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ORDERS
NSD 92 of 2021 BETWEEN: PIERS ARUNDELL
First Appellant
HAMISH BLIEVERS
Second Appellant
DAVID BURGESS (and others named in the Schedule)
Third Appellant
AND: MACQUARIE BANK LIMITED ACN 008 583 542
Respondent
ORDER MADE BY:
BROMBERG, WHEELAHAN AND SNADEN JJ
DATE OF ORDER:
17 FEBRUARY 2023
THE COURT ORDERS THAT:
1.By 4.00pm on 3 March 2023, the practitioners for the parties are to confer and submit to the Chambers of the members of the Full Court via email proposed draft orders to give effect to these reasons.
2.If the parties are unable to agree on draft orders, then by 4.00pm on 3 March 2023, each party is to file and serve:
(a)proposed draft orders giving effect to these reasons; and
(b)written submissions, not exceeding three pages, in support of their respective proposed orders.
3. Subject to further order, the Court will consider the orders on the papers.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
BROMBERG J:
These reasons deal with five appeals. Two of those appeals were instituted by 48 former employees of Macquarie Bank Limited (Bank) employed as financial advisers. The other three appeals were instituted by the Bank and beyond the 48 appellant employees, involved two further former employees of the Bank as respondents (together, employees). A multitude of grounds of appeal challenged the orders made by the primary judge, a judge of the Federal Circuit Court of Australia (as it was then known). Each of those grounds and the issues raised by them have been conveniently collected in the reasons of Wheelahan J which I have read in draft. After helpfully setting out relevant background matters, legislative and award-based provisions, the evidence and a summary of the reasons of the primary judge and both the grounds of each appeal and the submissions advanced on appeal by the parties, his Honour’s reasons (at [124]) identify that the issues raised give rise to eight questions which it is convenient to set out here:
(1)Is the remuneration that was paid by the Bank to the employees to be characterised as comprising commission only, as the employees submitted?
(2)Did the Bank discharge its obligations under the Award and the FW Act to pay wages or salary, and to make payments on account of leave, annual leave loading, and public holidays?
(3)Do cl 7 and cl 14 of the Award preclude the Bank from relying upon the regular monthly payments that were made to the employees under the BCR package to discharge its Award obligations to pay wages at the minimum rates fixed under cl 13.1 of the Award, and to make payments on account of leave, annual leave loading, and public holidays?
(4)Did the terms of the various deeds of release that are in issue defeat the claims of the relevant employees?
(5)Did the primary judge err in ordering the third and seventh applicants in the Wardman proceeding to pay the Bank’s costs of defending their claims on the ground that for the purposes of s 570 of the FW Act their proceedings had been instituted without reasonable cause?
(6)Was the primary judge in error in not holding that Sandford and Edwards were in breach of their deeds of release thereby engaging an obligation of repayment?
(7)Did the primary judge err in by failing to give reasons for determining that interest should be calculated from the commencement of the proceedings, rather than from when the money claims accrued?
(8)Did the primary judge make the errors that are alleged by the Bank in his Honour’s assessment of penalties?
I am most grateful to Wheelahan J for comprehensively ordering and setting out those matters. I rely upon them but they need not here be repeated. I respectfully concur with the conclusions his Honour has expressed at [285] and agree that orders should now be made for the parties to provide proposed orders consistent with those conclusions.
In relation to the questions numbered (4) to (8), I respectfully agree with the conclusions reached by Wheelahan J and do so for the reasons his Honour has given. In relation to questions numbered (1) to (3), I agree with the conclusions reached by Wheelahan J for the reasons which now follow.
Did the Bank discharge its obligations to pay award-wages?
I will commence with the first question which deals with whether the obligations upon the Bank to pay to each employee for each relevant pay period the wages provided for by the Banking, Finance and Insurance Award 2010 (Award), were discharged by the monthly payments made to the employees by the Bank (monthly payments) as payments due under the “Basic Cost Responsibility” (BCR) component of the remuneration payable to the employees under their respective contracts of employment.
By its submission, those payments were characterised by the Bank as payments of a monthly salary owed to the employees under their contracts of employment and, as payments of salary, capable of discharging the concurrent obligations imposed upon the Bank by the Award to pay the wages owed to the employees. Conversely, those payments were characterised by the employees as an advance on commissions owed to the employees under their employment contracts with the Bank and, as payments of commissions, incapable of discharging any concurrent Award obligation to pay the employees the wages they were owed.
As I will explain, the dispute as to the proper characterisation of the monthly payments is to be resolved by reference to the proper construction of each of the employment agreements in question. If those agreements imposed an obligation upon the Bank to pay a salary for the hours worked by the employees, then the payments made in discharge of that obligation would also discharge the closely correlative and concurrent Award-based obligation to pay the wages also owed by the Bank. Conversely, if there was no contractual obligation upon the Bank to pay the employee a salary for hours worked, the relevant payments made by the Bank should be construed as paid in satisfaction of the Bank’s contractual obligation to pay the employees commissions earned. The payment of commissions would not, for the reasons I also explain, serve to discharge the concurrent Award‑based obligation upon the Bank to pay each employee their wage in respect of each pay period in question.
It is not in contest that during the claim period, the employment of each of the employees was covered by the Award. The Award is in a familiar form largely consistent with the form taken by many “modern awards” made under the Fair Work Act 2009 (Cth) (FW Act). The Award imposes numerous obligations upon the Bank, each of which is enforceable by reason of the requirement made by s 45 of the FW Act that “[a] person [to whom the award applies] must not contravene a term of a modern award”. The Award provides for an employee to be engaged on a full-time, part-time or casual basis (cl 10). It provides that a full-time employee will work an average of 38 ordinary hours per week (cl 10.1) and be paid the “minimum wages” set out in cl 13. Part-time employees are to be paid on a pro-rata basis for each ordinary hour worked at the rate of no less than 1/38th of the minimum weekly rate of pay for a full-time employee (cl 10.2). The Award regulates work performed outside of ordinary hours of work (ie overtime) and provides that it be paid at specified penalty rates (cl 23). Employees must be paid “their salaries” weekly or fortnightly or monthly if mutually agreed (cl 20).
As will be apparent from those observations about the terms and nature of the Award, the remuneration which an employee is entitled to under the Award is time-based and not results or performance based. Employees are remunerated under the Award in exchange or in consideration for the time spent in providing their labour to their employer. Mainly the remuneration provided for by the Award is referred to as a “wage” but sometimes as a “salary”, however, the label is of no moment to the issues that here arise. It is convenient that I refer to the Award obligation to pay for the performance of ordinary hours worked as the obligation to pay “award-wages”. It is necessary to appreciate that the claims made by the employees in respect of the Bank’s failure to pay wages concerned the alleged non‑payment of award-wages only, there being no claims made for unpaid overtime.
It is not in contest that each of the monthly payments made to each employee by the Bank were for sums in excess of the amounts due in respect of each employee’s entitlement to award‑wages. Nor is it in contest that the relevant payments made to the employees by the Bank were payments made under their contracts of employment and in discharge of the contract-based remuneration owed to them. Those contracts provided for a remuneration structure which is somewhat unusual and which made no reference to the Award. However, as I will explain, the absence of any reference to the Award does not mean that the entitlements due to the employees under the Award were not capable of being satisfied or discharged by the contractual payments received by them.
It is well-settled in employment law that a single payment can concurrently satisfy both a contractual and an award-based or a statutory-based obligation to pay an employee the remuneration to which that person is entitled: Amalgamated Collieries of WA Ltd v True (1938) 59 CLR 417 at 431 (Dixon J). Thus, to take a simple example, if the contract provides for a weekly wage of $1,000 in exchange for 38 hours of work, the payment by the employer of $1,000 pursuant to that contractual obligation will also satisfy the employer’s concurrent obligation under an industrial award to pay $850 for the working by the employee of a 38 hour week.
There are, however, recognised limitations upon the circumstances in which an employer may claim that a payment made to an employee under contract was effective to discharge an outstanding award-based or statutory-based entitlement. The relevant cases are largely summarised in the reasons of North and Bromberg JJ in Linkhill Pty Ltd v Director, Office of the Fair Work Building Industry Inspectorate (2015) 240 FCR 578 at [40]-[67] and further supplemented by White J in WorkPac Pty Ltd v Rossato (2020) 278 FCR 179 at [824]-[859]. For present purposes, those limitations are sufficiently recounted in the observations I made in Rossato at [221]-[222] as follows:
[221]The legal principles relied upon by WorkPac have been the subject of numerous authorities. An extensive survey of the authorities is given in the reasons of White J and it is not necessary to undertake that exercise again here. Those authorities have largely been based on observations first made by Sheldon J in Ray v Radano [1967] AR (NSW) 471 at 478-479 and adopted and re-expressed by the Full Court (Keely, Ryan and Gray JJ) in Poletti v Ecob (No 2) (1989) 31 IR 321 at 332-333 as follows:
It is to be noted that there are two separate situations dealt with in the passage from the judgment of Sheldon J which has been quoted and in the reasoning of the Commission in Pacific Publications. The first situation is that in which the parties to a contract of employment have agreed that a sum or sums of money will be paid and received for specific purposes, over and above or extraneous to award entitlements. In that situation, the contract between the parties prevents the employer afterwards claiming that payments made pursuant to the contractual obligation can be relied on in satisfaction of award entitlements arising outside the agreed purpose of the payments. The second situation is that in which there are outstanding award entitlements, and a sum of money is paid by the employer to the employee. If that sum is designated by the employer as being for a purpose other than the satisfaction of the award entitlements, the employer cannot afterwards claim to have satisfied the award entitlements by means of the payment. The former situation is a question of contract. The latter situation is an application of the common law rules governing payments by a debtor to a creditor. In the absence of a contractual obligation to pay and apply moneys to a particular obligation, where a debtor has more than one obligation to a creditor, it is open to the debtor, either before or at the time of making a payment, to appropriate it to a particular obligation. If no such appropriation is made, then the creditor may apply the payment to whichever obligation or obligations he or she wishes. See Halsbury’s Laws of England, 4th ed, vol 9, paras 505 and 506.
[222]The first situation expresses a limitation (“first limitation”) upon the capacity of an employer to bring into account for one purpose monies paid for a different contractual purpose. The second situation expresses a limitation (“second limitation”) upon monies appropriated to one debt being brought into account to discharge a different debt.
The second limitation referred to in the extract just cited (second limitation) is, as there explained, an application of the common law rules governing payments by a debtor to a creditor. To illustrate by way of a simple example, if an employer is indebted to an employee for unpaid wages but also for an unpaid clothing allowance and makes a payment which is designated as a payment made for the wages owed, the employer cannot later claim that the payment was made in discharge of the debt owed in respect of the clothing allowance. The second limitation looks to the debt the payment was intended to satisfy. However, the second limitation upon an employer’s capacity to claim that an entitlement has been paid for was not here relied upon by the employees and I need not be further detained by it.
In contrast, the first limitation cited above (first limitation) relies upon the contract and what the parties have agreed to be the purpose of the payment which the contract requires be made. Again to illustrate by example, if the parties have agreed that for each ordinary (ie non‑overtime) hour of work performed the employee be paid $50 in circumstances where the applicable award provides for a minimum hourly rate of $30 for ordinary hours of work, an employer cannot claim the over-award payment of $20 per hour as a payment made for a different purpose, such as the satisfaction of an award obligation to pay for overtime work performed by the employee.
As the first limitation is a matter of contract, it follows, as I said in Rossato at [234] that:
… if a payment is made pursuant to a contract its purpose will be governed by the contract and must be objectively ascertained by reference to the common intention of the parties as understood by a reasonable person in the position of each of the parties taking into account the text of the contract as well as the surrounding circumstances known to the parties and the purpose and object of the transaction: Toll at [40] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ).
Secondly, the second limitation is dependent upon substance not form. It will have no application where there is a “close correlation between the nature of the contractual obligation and the nature of the award obligation” and a close correlation may exist despite those obligations being differently labelled: Australia and New Zealand Banking Group Limited v Finance Sector Union of Australia (2001) 111 IR 227 at [47], [51]-[52] (Black CJ, Wilcox and von Doussa JJ) and Linkhill at [98] (North and Bromberg JJ). As was explained in Linkhill at [98], it is the subject matter of the contractual obligation for which the payment was made which must be examined and found to closely correlate with the award obligation said to be discharged by the payment.
The essence of what appears to be the fundamental point made by the employees in application of the second limitation, is that the monthly payments made to them by the Bank were made in discharge of the Bank’s contractual obligation to pay each of them commissions pursuant to the remuneration structure of their contracts of employment.
If the employees are correct to say that the monthly payments made to them were for commissions owed by the Bank, they would also be correct to contend that the contractual purpose of the obligation imposed upon the Bank by their contracts of employment to pay a commission is not closely correlated with the purpose of the Award obligation to pay award‑wages for the hours worked by an employee. A commission is ordinarily a results-based payment and not a time-based payment and for that reason there would ordinarily be insufficient correlation between the purpose of a contractual obligation to pay an employee a commission based on results or performance and an award obligation to pay a wage for the hours worked by the employee. Each case, however, will turn on its own facts. Poulos v Waltons Stores (Interstate) Ltd (1986) 10 FCR 429 provides an illustration of a particular circumstance in which the payment of a commission was held not to discharge an employee’s entitlement to award‑based wages.
Those observations are, however, somewhat beside the point. That is so because in this case and as I understand the Bank’s submission, the Bank does not seek to avoid the application of the second limitation by relying upon a close correlation between the nature of an obligation to pay a commission and an obligation to pay a wage for hours worked. The Bank’s case is that the monthly payments were not commission payments. The Bank contended that in each month in question two separate streams of payments were made to each of the employees, each paid on different dates and on a different basis. The first stream (which I have called the monthly payments) was a “BCR payment” which comprised the salary component of the BCR. The second stream was said to be, and was not disputed to be, a commission payment. It is the payment of the salary component of the BCR which the Bank contended discharged the obligations imposed on it by the Award to pay each of the employees their award-wages for each of the pay periods in question.
The employees’ fundamental response to the Bank’s contention that the Award obligation to pay the award-wages was discharged by the payments made for salary was simply that there were no payments made for salary. Instead, they submitted that all the monthly payments made by the Bank were made in satisfaction of the Bank’s contractual obligation to pay the employees the commissions earned by them pursuant to the commission-based remuneration structure provided for by their contracts.
The employment contracts are largely in the same form but are not identical. The fifty employment agreements in question may be organised into eight groups as the reasons of Wheelahan J do at [136]-[162] and in the First Schedule to those reasons. His Honour has set out in the Second Schedule to those reasons extracts from each form of agreement sufficient to identify the terms of the contracts which are of significance to the constructional exercise here required of determining whether the contracts obliged the Bank to pay a salary beyond any obligation to pay commissions. I will first deal with what Wheelahan J has identified as the Form One contracts, which include the contract of Mr Wardman and twenty-four other employees.
The relevant principles for construing a contract are well known. The common intention of the parties to a contract is to be objectively ascertained which normally “requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ). Further, as French CJ, Nettle and Gordon JJ said in Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104 at [51] “a commercial contract should be construed so as to avoid it ‘making commercial nonsense or working commercial inconvenience’”.
Of primary significance to the constructional exercise are the terms of the clause headed “Remuneration”. The clause is not well drafted. It begins by explaining that the employee will be “remunerated under the Employer’s Commission Base Structure as part of the Employer’s Basic Cost Responsibility (BCR) system”. While those references suggest the existence of documents which detail the nature and form of what is referred to as the Basic Cost Responsibility system, the terms of that policy or arrangement are not incorporated and do not form part of the contract. Instead, what the contracts seem to do is refer to aspects of the BCR system without identifying the whole of it. It seems to me that for that and other reasons, the contracts are not clear and in particular as to whether the references therein made to “salary” are intended to refer to a notional cost to the Bank relevant only for calculating the commission payable to the employee or, on the other hand, an actual cost to the Bank providing a guaranteed base level of remuneration to the employee which is not dependent upon employee performance and the achievement of commission targets.
If the references to “salary” are intended to only refer to a notional cost, notional in the manner just identified, then I would agree with the employees’ characterisation of the monthly payments as commission payments paid in advance. Consequentially, I would also accept the uncontested contention of the employees that such payments were not capable of discharging the Bank’s obligation to pay the award-wages they were due.
If, on the other hand, the contracts intended to provide the employees with a guaranteed monthly payment payable irrespective of whether any commission targets were met and commission was thereby earned, the contracts should be construed as obliging the Bank to remunerate the employees for the time-based provision of their labour. Further, if that is the purpose of the contractual obligation to pay a salary, that purpose has a close correlation with the purpose of the Award obligation to pay employees an award-wage for the time-based provision of their labour. Accordingly, the discharge of the contractual obligation by the monthly payments would have concurrently discharged the Award-based obligation to pay the employees the award-wages due in each of the months in question.
The constructional exercise is not free from difficulty. Whilst I have not reached a clear view, I have been persuaded that the preferable construction of the Form One contracts is that the Bank is obliged to pay the employees a monthly sum for their time-based provision of labour irrespective of whether any commission targets are met and any commission is earned by the employee.
It is sufficiently clear that when, in the opening paragraph of the “Remuneration” clause, the contracts refer to the “BCR” they are referring to a dollar figure said to represent “the total cost of your employment”. In the Form One version of the contracts, unlike some of the other forms of the contracts, the second sentence of the “Remuneration” clause does not specifically refer to salary as a cost component of the BCR. Despite that, it is clear enough given the later references made to salary, that the employee’s salary cost is a component of the BCR.
As part of the BCR, the salary component is relevant to the function of the BCR of providing a financial benchmark which the commissions generated by the employee must satisfy before commissions which exceed the benchmark become payable. The discernible concept which underpins that function is the idea that before the employee should become entitled to commission income, the commissions generated by the employee should off-set the “costs of employment” of the employee incurred by the Bank. So much is made sufficiently clear by the Form One contracts as a whole including the following terms, the first from the “Remuneration” clause and the second from the “Payment of Commission” clause:
You will be allocated a BCR, which is a recoverable allocation against any commission earned.
…
Commission payments will be first applied against BCR allocation, including the cost of packaged items, if any, for the year to date. Once your commission payments exceed the BCR allocation and the cost of all packaged items, the remaining commission balance will be paid to you. Payroll tax and workers compensation charges on commission payable (i.e. commission earned less BCR allocation) will be borne by the Employer.
If that was the only function for the “salary” contemplated by the contracts, the salary would be notional and solely concerned with the calculation of commissions in the sense earlier described. However, the contracts do not limit the intended function of a salary to that of merely being a financial benchmark relevant to the calculation of commissions payable to the employees. There are two provisions which serve to demonstrate that the salary is intended as an entitlement to remuneration which the employee is entitled to be paid, irrespective of any entitlement the employee may or may not have to be paid a commission. Both provisions are in the “Remuneration” clause. The first states:
Your base net salary will be payable monthly on the 15th day of each month (being two weeks in arrears and two weeks in advance) by direct deposit to a bank account.
The second is the third paragraph of the “Remuneration” clause (emphasis added):
If your earned commission is less than your BCR allocation at the end of the month, this deficit will be rolled forward to the next month and offset against available net commission. To the extent that your earned commission is less than your base BCR allocation in a given year, you will not be required to pay the shortfall to the Employer, however, your base rate will be revised and may be reduced by the Employer in line with the Minimum Performance Clause of this Agreement. The Employer may also reduce your BCR allocation at any point throughout the Commission year if it appears to the Employer that your earned commission will be less than your base BCR allocation for the year.
Those provisions make it sufficiently clear that the Bank is obliged to pay a salary (or what, in employment contracts which value a capacity to earn commission, is often called a “retainer”) and that the employee is entitled to retain the salary paid. The salary is not merely a notional cost and, because the employee is entitled to retain the payment irrespective of whether sufficient commission is earned in the relevant year to allow the cost to be off-set against commission earned, the payment of the salary cannot be characterised as no more than an advance on future commission payments. The characterisation of the monthly payments as an advance on future commission earnings was critical to the construction contended for by the employees. That characterisation is not to be preferred because the employees are entitled to retain the salary payment irrespective of whether the cost can be off-set against future commission earnings. The better view is that the monthly payments are payments made for their stated purpose – a payment of the employee’s “base net salary”.
It is important I think to pause and consider the discernible rationale for the bolded words in the third paragraph. To my mind, the provision recognises the intent of the parties that the employee be remunerated despite the employee not achieving or sufficiently achieving commission targets which would entitle the employee to be paid a commission. There is here a recognition that the employee should be paid something for his or her time-based provision of labour irrespective of whether those efforts result in particular performance targets being met. That is the usual purpose of what is commonly referred to as a “retainer” in an employment contract which provides for remuneration to be earned by way of commissions. The idea that despite substantial effort an employee should earn nothing at all runs counter to both common employment practices and makes little commercial or industrial sense even where it is obvious, as is here the case, that the parties contemplated that incentivising forms of remuneration would very substantially account for the employee’s likely earnings. That rationale, in my view, very significantly supports the view that the monthly payments were intended to provide a minimum guaranteed level of remuneration and should not be characterised as merely an advance on future commission earnings.
I appreciate that the capacity given to the Bank in the third paragraph of the “Remuneration” clause to unilaterally reduce the employee’s salary runs somewhat counter to the rationale I have just identified. However, a capacity to reduce is not necessarily to be construed as a capacity to eliminate, especially where to eliminate or even to reduce the employee’s salary to a level lower than the minima acceptable to the employee would make no commercial or industrial sense. It may, in that context, be inferred that it was intended that the discretion given to the Bank would be exercised reasonably. In any event, it seems to me that the identified rationale is the only discernible rationale available to explain the intention of the parties.
Despite the infelicitous drafting and consequent ambiguity, I read the reference to “base BCR allocation” in the third paragraph of the “Remuneration” clause as a reference to salary. The word “salary” is used synonymously with “base BCR” in the “Payment of Commission” clause, where the expression “your salary/base BCR” is used. There are many occasions where “base BCR” seems to be utilised not interchangeably but in contrast with “BCR”. Furthermore, the adjective “base” connotes that a component rather than the whole of the BCR is being referred to and the component of the BCR being referred to in the third paragraph of the “Remuneration” clause must be the salary component of the BCR because that is the only component which could be retained by the employee, as it is the only component which the contract requires be paid to the employee. In any event, even if “base BCR” meant the whole of the BCR, the sentence in question can only be sensibly construed as providing that so much of the BCR which has been paid to the employee (which must include their “base net salary … payable monthly”) may be retained by the employee.
I acknowledge that there is some tension between the provision in the third paragraph of the “Remuneration” clause providing that the employee “will not be required to pay the shortfall” and the sentence which Senior Counsel for the employees described as the “critical sentence in our case”, being the sentence set out above at [27] stating that the BCR “is a recoverable allocation against any commission earned”. However the two provisions are reconcilable. The latter is a statement of the general rule that the BCR will be offset against commissions generated by the employees. The former is intended to identify an exception to the general rule specific to the salary component of the BCR. The exception must obviously have been intended to prevail.
The employees also pointed to the sixth paragraph of the “Remuneration” clause dealing with the packaging of remuneration. That was asserted to be an exception to the capacity of an employee to retain the salary paid in circumstances where the salary was packaged and not off‑set by commission earnings earnt within the same year. It is not clear to me that the provision is an exception at all. The contracts contemplate the packaging of commission earnings, as the provision set out at [27] above confirms. It seems to me that is the more likely subject of the provision. If the packaging of “salary” was its subject then the provision would sit in conflict with the provision which permits the employee to retain his or her “salary”. Given the rationale for the latter provision as described above, it would be strange if it were intended that salary paid in money and salary paid through a salary packaging arrangement were intended to be treated differently.
Lastly, some assistance to the construction I prefer is provided by the “Termination of Appointment” clause, in that the clause requires the Bank to pay four weeks of “salary” to the employee in lieu of notice. Further, the “Remuneration” clause’s disallowance of any claim for overtime, supports the conclusion that at least some remuneration payable under the contracts are directed to the time-based performance of work.
For the purposes of the present analysis, the Form One contracts are not relevantly different to the Form Two, Three, Four, Five, Six and Seven contracts. The reasons of Wheelahan J characterise Mr Marr’s contract as the only Form Eight contract and for reasons I will explain, the terms of that contract are sufficiently different to warrant separate considerations. I note that the employees’ case was put on the basis that, relevantly, all the contracts were the same because the BCR remuneration model was said to be the same for every employee. Senior Counsel for the employees acknowledged that whilst the wording of some of the provisions amongst the various contracts differed, that “did not impact on the model”. Putting to one side Mr Marr’s contract, I agree that all of the contracts are not relevantly different. My analysis of the Form One contracts applies equally to those other contracts.
Turning then to Mr Marr’s contract. That contract relevantly states (emphasis added):
2. Remuneration
2.1 Remuneration Package
You will be employed under the Bank's Commission Based Structure. This structure provides a base package (BCR), combined with structured commission payments. Employees remunerated under a Commission Based Structure are not eligible to claim overtime or other penalty rates.
2.2 Base Package (BCR)
Under this structure, a base package remunerated under the Bank's Basic Cost Responsibility Plan (BCR) will be treated as an advance on commission. The BCR represents the total cost of employment inclusive of superannuation, fringe benefits tax, payroll tax, and workers compensation insurance. BCR levels are reviewed annually, and effective 1 July. To the extent that an employee does not earn enough commission to cover their base BCR in a given year, they will not be required to repay MBL, for the given year in any subsequent years, however their BCR rate will be revised and may reduce in line with Clause 2.3 below
2.3 Minimum Performance Criteria
Individual employees' minimum performance levels will be set in consultation with the Adviser and then reviewed annually to establish levels at which an Adviser must consistently perform.
If the adviser does not meet their individual performance criteria as determined in the annual performance review and has not repaid their annual BCR advance, effective the next remuneration year the rate of BCR will reduce. In this instance where BCR was $80,000 per annum, the reduced BCR would be $60,000 per annum. Where BCR was $60,000 the reduced BCR would be $40,000 per annum. BCR would not reduce below $40,000 per annum.
Where minimum performance criteria are not achieved formal performance counselling will commence.
2.4 Commission Structure
...
2.6 Payment of Commission
Commission will be paid quarterly in arrears. All commission payments (as outlined in the Commission Structure) will be applied to the advanced BCR amount for the quarter, until the advanced balance is reduced to zero.
The commission year will be specified as the period 1 April in a given year to the following 31 March.
Once the BCR advance amount for the quarter has been reduced to zero, the remaining commission balance will be paid in full. Payroll tax and workers compensation charges on commission payable (minus BCR advance) will be borne by the business. Commission payments can not be credited to the individual's BCR entitlement to provide a surplus or rollover for the subsequent year. Commission payments can not be credited to the individual's BCR to increase the base BCR.
It appears to me that the terms of cl 2.1 expressly acknowledge that there are two components to Mr Marr’s remuneration – a “base package” being the BCR and secondly remuneration by way of commission payments.
There is no reference made to Mr Marr being paid a salary, the word salary is not found at all, but it is clear enough that the Bank is to provide the “base package” by paying to Mr Marr what clause 2.2 describes as his “base BCR”, being the sum paid to Mr Marr which is retained by him irrespective of whether any off-setting commissions are generated.
There is no indication as to when Mr Marr is to be paid the “base BCR”. Consistently with the unchallenged finding of the primary judge, I have assumed Mr Marr was paid pro-rata on a monthly basis as were the other employees, but the assumption makes no difference to the analysis.
For largely the same reasons as pertained to the other forms of contract, the payment of the base BCR should not be characterised as the payment of commission. Indeed Mr Marr’s contract may be said to more clearly identify that there are two separate components to the remuneration made available to him – a guaranteed “base package” together with commission income.
The first sentence in cl 2.2 providing that the “base package…will be treated as an advance on commission” is not saying that the base package payments required to be paid by the Bank are to be paid as commission. Properly construed the sentence is merely saying that for the purposes of calculating the commissions due to Mr Marr, the payments of the base package (ie the base BCR) will be deemed to be commission payments.
Although differently worded to contracts in Form One to Seven, there is no reason for reaching a different conclusion in relation to Mr Marr’s contract.
For those reasons, I have concluded in respect of each employee and each pay period in question, that the monthly payments made by the Bank discharged the Bank’s obligation to pay the award-wages due. In reaching that conclusion and for the reasons given by Wheelahan J at [163]-[191] I have not regarded the “BCR policy”, the letter of 18 June 2010 or the asserted failure of the Bank to have utilised the annual salary or flexibility provision in the Award, as of relevance to the issues I have determined.
Did the Bank discharge its statutory obligations to provide paid leave and provide payment for public holidays?
I respectfully agree with the conclusions reached by Wheelahan J that the statutory obligations upon the Bank to provide paid leave and payment for public holidays were discharged by the monthly payments. The nature of paid leave generally and the nature of paid leave as provided for under ss 90, 99, 106 and 116 of the FW Act is that it has two relevant elements. It is firstly an entitlement provided to an employee to be absent from work and secondly, and despite that absence, an entitlement to be paid for the period of the absence: see Mondelez v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union (AMWU) (2019) 270 FCR 513 at [148] (Bromberg and Rangiah JJ); Rossato at [226] (Bromberg J).
The only claim made by the employees was a claim in relation to that part of the statutory entitlements which required that the employees be paid whilst absent, each of those statutory obligations providing that the employee be paid “the employee’s base rate of pay for the employee’s ordinary hours of work in the period”. In the case of the employees here in question, that entitlement was an entitlement to be paid what I have referred to as their award‑wages. For the reasons already given, the employees were paid their award-wages in respect of the entirety of the claim period (including any periods of leave or absence and during any public holiday), because they were paid the monthly payments and those payments discharged what was owed by the Bank in respect of award-wages.
Did the Bank discharge its Award obligation to pay leave loading?
Clause 24.3 of the Award required the Bank to pay a loading of 17.5% during a period of annual leave. For the reasons given by Wheelahan J, the obligations upon the Bank to pay leave loading were not discharged other than in respect of Mr Haslem, Mr Mackenzie and Mr Ryan.
Conclusion
For those reasons, orders should be made to give effect to the conclusions expressed in the reasons of Wheelahan J at [285].
I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Bromberg. Associate:
Dated: 17 February 2023
REASONS FOR JUDGMENT
WHEELAHAN J:
Introduction
These five appeals were heard together. The appellants in all appeals challenge decisions of the Federal Circuit Court of Australia (as it was then known) in three proceedings in the Fair Work Division of that Court that were heard by the same judge. Two of the five appeals are brought by 48 former employees of Macquarie Bank Ltd (the Bank) who were applicants in the three proceedings below. The Bank, which was the respondent in the three proceedings below is the appellant in the other three appeals. There are 50 former employees who are respondents to those appeals, who include two former employees who are not among the 48 employee appellants. It is convenient to refer to the former employees as the employees, and without intending any disrespect, to refer to them individually by their surnames.
The main questions on appeal concern whether payments made by the Bank to the employees pursuant to their contracts of employment were effective to discharge concurrent statutory obligations arising under the Fair Work Act 2009 (Cth) (FW Act), namely obligations to comply with a modern award, the Banking, Finance and Insurance Award 2010 (the Award), and obligations to comply with the National Employment Standards (NES). The primary judge held that in several respects the payments made to the employees were ineffective to discharge the Bank’s statutory obligations, and made declarations, orders for payment to a number of the employees, and orders imposing civil penalties upon the Bank.
The employees challenge the primary judge’s findings in relation to claims of non-payment of Award-based wages that the primary judge rejected. Correspondingly, the Bank challenges the primary judge’s findings of non-payment of statutory entitlements relating to leave, public holidays, and loadings that were adverse to the Bank. There are also a number of ancillary issues raised on the appeals, including whether the primary judge was in error in holding that some of the employees had released the Bank from liability, whether the judge was in error in assessing penalties, whether the judge’s reasons in relation to the calculation of interest were adequate, and whether the judge was in error in making orders for costs against some of the employees on the ground that their claims were brought without reasonable cause.
The appeals
I will identify the three proceedings below as follows –
(a)SYG 2834 of 2019 (the Arundell proceeding);
(b)SYG 1540 of 2018 (the Wardman proceeding); and
(c)SYG 781 of 2019 (the Briody proceeding).
As I have mentioned, there are 48 appellants who were employees of the Bank. The 15 employees who are the appellants in appeal NSD 92 of 2021 were amongst the 21 applicants in the Arundell proceeding in the court below. The Arundell proceeding was the subject of separate consideration of contravention (including liability to pay additional amounts) and penalties: Arundellv Macquarie Bank Ltd [2020] FCCA 2720 (contravention); Arundellv Macquarie Bank Ltd (No 2) [2020] FCCA 3313 (penalties). The hearing relating to the contravention and liability issues in the Arundell proceeding took place on 28 and 30 September 2020, and judgment was given on 2 October 2020.
Of the 33 employees who are appellants in appeal NSD 88 of 2021 –
(a)14 were amongst the 15 applicants in the Wardman proceeding in the court below; and
(b)19 were amongst the 20 applicants in proceeding the Briody proceeding in the court below.
The Wardman proceeding and the Briody proceeding were heard together by the primary judge, with the hearing relating to contravention and liability issues taking place on 2 October 2020. On the same day, the primary judge gave combined reasons for judgment on those issues: Wardman v Macquarie Bank Ltd; Briody v Macquarie Bank Ltd [2020] FCCA 2725. After hearing further from the parties, the primary judge gave separate reasons for judgment on penalties: Wardman v Macquarie Bank Ltd (No 2) [2020] FCCA 3317; Briody v Macquarie Bank Ltd (No 2) [2020] FCCA 3318.
The Bank’s three appeals, NSD 89 of 2021, NSD 90 of 2021, and NSD 91 of 2021, are brought against the orders made by the primary judge in, respectively, the Wardman proceeding, the Arundell proceeding, and the Briody proceeding. In the Bank’s appeal against the orders made in the Arundell proceeding, the eighth respondent, King, has filed a submitting notice, although mistakenly referring to himself in the submitting notice as the eleventh respondent.
Often, the best advocacy is selective and economical: Whisprun v Dixon [2003] HCA 48; 200 ALR 447 at [18] (Gleeson CJ and McHugh J). While each of the employees was the subject of a separate employment agreement, and while the circumstances of all the employees were not identical, it is apparent that the litigation both in the Court below and in this Court took a somewhat global approach where the focus was on some significant issues that were common to the circumstances of the employees. This approach no doubt had cost and efficiency benefits, and focused on the real issues. However, in taking a global approach individual employees may have made some compromises in the way their claims were advanced.
Background
The employees were employed by the Bank, in the main as “advisers”, although the position titles varied. The duties of the employees included the provision of advice to private clients of the Bank, executing share transactions on behalf of the clients, seeking out new clients, and generating revenue for the Bank as a result of share transactions on behalf of clients and other fees charged to clients for financial products and financial services.
The employment of most of the employees began prior to the commencement on 1 January 2010 of the FW Act and the Award. It is not in issue that the employees were employed by the Bank for various periods from 1 January 2010 during which they were covered by the Award. It is also not in issue that the employees were entitled to the benefit of the National Employment Standards under the FW Act. The employees’ claims in the three proceedings were for amounts that were alleged to have accrued in the six year periods prior to the commencement of the proceedings, reflecting the limitation period in s 544 of the FW Act. The commencement dates of the three proceedings varied, and were as follows –
(a)the Arundell proceeding – 31 October 2019;
(b)the Wardman proceeding – 31 May 2018; and
(c)the Briody proceeding – 29 March 2019.
Each of the employees was the subject of a contract of employment, the terms of which were contained in documents such as letters of offer and employment agreements. However, the written terms took several different forms. All of the contracts of employment provided for the employees to be remunerated in accordance with a remuneration package that included a commission structure, and a component that was referred to as “Basic Cost Responsibility”, or “BCR”. The Bank claimed that the BCR represented an employee’s total cost of employment, including annual remuneration, superannuation, fringe benefits tax, payroll tax, workers’ compensation insurance premiums, salary continuance insurance premiums, and goods and services tax where applicable. Employees could elect how their remuneration should be packaged. During the relevant employment period of each employee, a fixed component of the BCR package was paid to the employees by 12 equal payments in the middle of each month, with half in advance and half in arrears. The Bank referred to these monthly payments as the “salary component” of the BCR. Pay advices given to the employees identified the payments as “Salaries Normal”. That form of pay advice included a heading rate with a specified hourly amount.
The value of the BCR package was set at $60,000 per annum from 1 July 2010. It was increased to $65,000 per annum from 1 July 2015, and further increased to $70,000 per annum from 1 July 2020, which was after the commencement of the three proceedings, but before judgment. It is relevant to note that the annual amounts referred to above were the total value of the BCR packages, and not what the Bank claimed were the gross salary components that were included in the packages, which were lower amounts.
The Bank claimed that this form of remuneration structure had the result that for the relevant periods of employment, there were two streams of payments. The first stream of payments was the BCR which included the fixed salary component of the remuneration. The second stream was commission payments that were identified as being a variable component of the remuneration. The effect of this remuneration structure was contentious. The employees claimed that they were remunerated by way of commission only, and that for the relevant periods they had not been paid any wages or salary for the duties performed by them as required by the Award. The employees claimed that the monthly payments that were made to them were advances on commission, and were not to be attributed to wages or salary, or other entitlements under the Award or the NES. The employees claimed, amongst other entitlements, wages by reference to hours that they claimed they had worked that were set out in schedules to their pleadings in the proceedings below, and payments on account of leave entitlements, annual leave loadings, and accrued annual leave and loadings at the time of termination of their employment. In response, the Bank claimed that the employees had been paid amounts that were in excess of the ordinary hourly rates of pay prescribed by the Award, and that the salary component of the BCR that was paid to the employees was in satisfaction of any wages that may otherwise have been payable to them under the Award.
In each of the three proceedings the employees claimed payment of specified monetary amounts which they claimed were due to them under the Award. By reference to the Award, the employees claimed that the Bank was required to pay them minimum weekly rates of pay that equated to hourly rates on the basis of a 38 hour week for ordinary hours worked by the employees. For each employee, a spreadsheet was attached to the relevant statement of claim which, on a month by month basis, made claims as to hours worked for the month, and made a claim for wages by multiplying the hours claimed by an hourly rate. No claims for overtime appear to have been made. In addition, claims were made for payments on account of leave, and public holidays.
It was a feature of the employees’ claims that were particularised in the schedules to the statements of claim that, consistently with the cases that they advanced at trial and on appeal, the whole of their claimed award and statutory entitlements were alleged to have been unpaid. No account was taken of any monetary sums paid by the Bank to the employees by way of remuneration. The employees’ case was that any such sums were advance payments of commission, which did not discharge the Bank’s statutory and award obligations. This case was also reflected in the orders sought on appeal, namely that this Court order that the Bank pay to each of the employees sums identified in the notices of appeal that corresponded to the amounts claimed as “wages” in the spreadsheets annexed to the statements of claim.
The legislation
Before going further, I will refer to the material provisions of the legislation and the Award that underpinned the employees’ claims.
The Fair Work Act
One of the express objects of the FW Act is to ensure “a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders”: s 3(b). The National Employment Standards that are referred to in the objects that are set out in s 3 of the FW Act are contained in Part 2-2 of the Act, and provide for minimum standards that apply to the employment of employees that cannot be displaced. Section 44 of the FW Act provides that an employer must not contravene a provision of the National Employment Standards. Relevant to the current appeals are minimum standards relating to –
(a)paid annual leave (ss 87 to 94);
(b)personal/carer’s leave (ss 95 to 101);
(c)compassionate leave (ss 104 to 106); and
(d)payment for public holidays (ss 114 to 116).
The FW Act provides in ss 90, 99, 106, and 116 for the payment of remuneration for leave and for public holidays at the employee’s base rate of pay for the employee’s ordinary hours of work during the period of leave and for the day or part‑day of the public holiday. Subsection 16(1) of the FW Act defines “base rate of pay” in the following terms –
16 Meaning of base rate of pay
General meaning
(1)The base rate of pay of a national system employee is the rate of pay payable to the employee for his or her ordinary hours of work, but not including any of the following:
(a)incentive-based payments and bonuses;
(b)loadings;
(c)monetary allowances;
(d)overtime or penalty rates;
(e)any other separately identifiable amounts.
Section 323 of the FW Act provides for the method and frequency of the amounts payable to an employee in respect of the performance of work –
323 Method and frequency of payment
(1)An employer must pay an employee amounts payable to the employee in relation to the performance of work:
(a)in full (except as provided by section 324); and
(b)in money by one, or a combination, of the methods referred to in subsection (2); and
(c)at least monthly.
Note 1:This subsection is a civil remedy provision (see Part 4-1).
Note 2:Amounts referred to in this subsection include the following if they become payable during a relevant period:
(a) incentive-based payments and bonuses;
(b) loadings;
(c) monetary allowances;
(d) overtime or penalty rates;
(e) leave payments.
(2)The methods are as follows:
(a)cash;
(b)cheque, money order, postal order or similar order, payable to the employee;
(c)the use of an electronic funds transfer system to credit an account held by the employee;
(d)a method authorised under a modern award or an enterprise agreement.
(3)Despite paragraph (1)(b), if a modern award or an enterprise agreement specifies a particular method by which the money must be paid, then the employer must pay the money by that method.
Note:This subsection is a civil remedy provision (see Part 4-1).
Section 536 of the FW Act provides that an employer must give a pay slip to each of its employees –
536Employer obligations in relation to pay slips
(1)An employer must give a pay slip to each of its employees within one working day of paying an amount to the employee in relation to the performance of work.
Note 1:This subsection is a civil remedy provision (see Part 4-1).
Note 2:Section 80 of the Paid Parental Leave Act 2010 requires an employer to give information to an employee to whom the employer pays an instalment under that Act.
(2)The pay slip must:
(a) if a form is prescribed by the regulations—be in that form; and
(b) include any information prescribed by the regulations.
Note 1:This subsection is a civil remedy provision (see Part 4-1).
Note 2:If an employer fails to comply with subsection (1) or (2), the employer may bear the burden of disproving allegations in proceedings relating to a contravention of certain civil remedy provisions: see section 557C.
(3)An employer must not give a pay slip for the purposes of this section that the employer knows is false or misleading.
Note: This subsection is a civil remedy provision (see Part 4-1).
(4)Subsection (3) does not apply if the pay slip is not false or misleading in a material particular.
Fair Work Regulations
Regulations 3.45 and 3.46 of the Fair Work Regulations 2009 (Cth) (FW Regulations) prescribe the form and content of a pay slip –
3.45 Pay slips—form
For paragraph 536(2)(b) of the Act, a pay slip must be:
(a) in electronic form; or
(b) a hard copy.
Note:Subsection 536(2) of the Act is a civil remedy provision. Section 558 of the Act and Division 4 of Part 4-1 deal with infringement notices relating to alleged contraventions of civil remedy provisions.
3.46 Pay slips—content
(1)For paragraph 536(2)(b) of the Act, a pay slip must specify:
(a)the employer’s name; and
(b)the employee’s name; and
(c)the period to which the pay slip relates; and
(d)the date on which the payment to which the pay slip relates was made; and
(e)the gross amount of the payment; and
(f)the net amount of the payment; and
(g)any amount paid to the employee that is a bonus, loading, allowance, penalty rate, incentive-based payment or other separately identifiable entitlement; and
(h)on and after 1 January 2010—the Australian Business Number (if any) of the employer.
(2)If an amount is deducted from the gross amount of the payment, the pay slip must also include the name, or the name and number, of the fund or account into which the deduction was paid.
(3)If the employee is paid at an hourly rate of pay, the pay slip must also include:
(a)the rate of pay for the employee’s ordinary hours (however described); and
(b)the number of hours in that period for which the employee was employed at that rate; and
(c)the amount of the payment made at that rate.
(4)If the employee is paid at an annual rate of pay, the pay slip must also include the rate as at the latest date to which the payment relates.
(5)If the employer is required to make superannuation contributions for the benefit of the employee, the pay slip must also include:
(a)the amount of each contribution that the employer made during the period to which the pay slip relates, and the name, or the name and number, of any fund to which the contribution was made; or
(b)the amounts of contributions that the employer is liable to make in relation to the period to which the pay slip relates, and the name, or the name and number, of any fund to which the contributions will be made.
(6)In subregulation (5):
contributions does not include a contribution in respect of a defined benefit interest (within the meaning of the Superannuation Industry (Supervision) Regulations 1994) in a defined benefit fund (within the meaning of the Superannuation Industry (Supervision) Act 1993).
Note:Subsection 536(2) of the Act is a civil remedy provision. Section 558 of the Act and Division 4 of Part 4-1 deal with infringement notices relating to alleged contraventions of civil remedy provisions.
The Award
Sections 45 and 46 of the FW Act have the effect that a person to whom a modern award applies must not contravene a term of the award.
Clause 2.2 of the Award provided that monetary obligations imposed on employers by the Award could be absorbed into overaward payments –
2.2The monetary obligations imposed on employers by this award may be absorbed into overaward payments. Nothing in this award requires an employer to maintain or increase any overaward payment.
Clause 6 of the Award provided that –
The NES and this award contain the minimum conditions of employment for employees covered by this award.
Clause 7 was titled “Award flexibility”, and provided for individual agreements that might effect a variation of the application of certain terms of the Award –
7.1Notwithstanding any other provision of this award, an employer and an individual employee may agree to vary the application of certain terms of this award to meet the genuine individual needs of the employer and the individual employee. The terms the employer and the individual employee may agree to vary the application of are those concerning:
(a) arrangements for when work is performed;
(b) overtime rates;
(c) penalty rates;
(d) allowances; and
(e) leave loading.
…
7.3The agreement between the employer and the individual employee must:
(a)be confined to a variation in the application of one or more of the terms listed in clause 7.1; and
(b)result in the employee being better off overall at the time the agreement is made than the employee would have been if no individual flexibility agreement had been agreed to.
7.4The agreement between the employer and the individual employee must also:
(a)be in writing, name the parties to the agreement and be signed by the employer and the individual employee and, if the employee is under 18 years of age, the employee’s parent or guardian;
(b)state each term of this award that the employer and the individual employee have agreed to vary;
(c)detail how the application of each term has been varied by agreement between the employer and the individual employee;
(d)detail how the agreement results in the individual employee being better off overall in relation to the individual employee’s terms and conditions of employment; and
(e)state the date the agreement commences to operate.
…
Clause 13.1 of the Award provided for minimum rates of pay for full-time adult employees within six escalating classifications. The employees who are parties to this appeal were Level 6 employees as described in the classification structure set out in Schedule B to the Award. The version of the Award that was before the Court provided –
13.1 Adult employees
(a)A full-time adult employee must be paid a minimum rate for their classification as set out in the table below:
Level Minimum annual salary $ Minimum weekly rate $ Level 1 39,764 764.70 Level 2 43,545 837.40 Level 3 45,994 884.50 Level 4 48,298 928.80 Level 5 50,258 966.50 Level 6 56,290 1082.50
(b)The classification structure and descriptors for the above classifications are contained in Schedule B—Classification Structure.
Clause 14 of the Award authorised the payment of an annualised salary in satisfaction of several provisions of the Award, providing that the employer must advise the employee in writing of the annual salary that is payable and which of the provisions of this award will be satisfied by payment of the annual salary –
14. Annualised salaries
14.1 Annual salary instead of award provisions
(a)An employer may pay an employee an annual salary in satisfaction of any or all of the following provisions of the award:
(i) clause 13—Classifications and minimum wage rates;
(ii) clause 18—Allowances;
(iii) clause 23—Overtime and penalty rates; and
(iv) clause 24.3—Annual leave loading.
(b)Where an annual salary is paid the employer must advise the employee in writing of the annual salary that is payable and which of the provisions of this award will be satisfied by payment of the annual salary.
14.2 Annual salary not to disadvantage employees
(a)The annual salary must be no less than the amount the employee would have received under this award for the work performed over the year for which the salary is paid (or if the employment ceases earlier over such lesser period as has been worked).
(b)The annual salary of the employee must be reviewed by the employer at least annually to ensure that the compensation is appropriate having regard to the award provisions which are satisfied by the payment of the annual salary.
14.3 Base rate of pay for employees on annual salary arrangements
For the purposes of the NES, the base rate of pay of an employee receiving an annual salary under this clause comprises the portion of the annual salary equivalent to the relevant rate of pay in clause 13—Classifications and minimum wage rates and excludes any incentive-based payments, bonuses, loadings, monetary allowances, overtime and penalties.
Clause 20 of the Award addressed the manner of payment of wages –
20. Payment of wages
20.1Employees must be paid their salaries weekly or fortnightly as determined by the employer or monthly if mutually agreed. Where payment is made monthly it must be on the basis of two weeks in advance and two weeks in arrears.
20.2Wages must be paid either by cash, cheque or electronic funds transfer, the method of which will be determined by the employer.
Clause 24.3 of the Award provided for an annual leave loading of 17.5% –
24.3 Annual leave loading
(a)During a period of annual leave an employee will receive a loading calculated on the rate of wage prescribed in clause 13—Classifications and minimum wage rates. Annual leave loading payment is payable on leave accrued.
(b)The loading is as follows:
(i) Day work
Employees who would have worked on day work only had they not been on leave—17.5% or the relevant weekend penalty rates, whichever is the greater but not both.
(ii) Shiftwork
Employees who would have worked on shiftwork had they not been on leave—17.5% or the shift loadings and relevant weekend penalty rates, whichever is the greater but not both.
Clauses 25 and 27 provided, respectively, that personal/carer’s leave and public holidays were provided for in the National Employment Standards.
The evidence
Owing to the number of claims, the written evidence at the hearings before the primary judge was extensive. In all proceedings, evidence was given by affidavit. Each employee made at least one affidavit, and most employees made two affidavits. In relation to issues other than penalty, in the Wardman proceeding 35 affidavits were read to the court below; in the Briody proceeding 43 affidavits were read to the court below; and in the Arundell proceeding 47 affidavits were read to the court below. Several other documents were received into evidence and marked as exhibits. The primary judge made rulings on objections to the affidavit evidence which were recorded in orders that his Honour made in the proceedings. Only one witness, Gamble, who was an applicant in the Arundell proceeding and who is both an appellant and a respondent in the relevant appeals, was cross-examined. Gamble was the subject of a successful cross-claim by the Bank, which established that it had mistakenly overpaid him upon the termination of his employment.
Form Six
Employment agreements of:
45. Richard Haslem dated 22 March 2012
46. Scott Mackenzie dated 30 June 2011
47. Emmett Ryan dated 25 May 2011
Extracts of remuneration clauses
Extracts of commission payment clauses
Extracts of leave entitlement clauses
REMUNERATION
You will be remunerated under the Employer’s Commission Based Remuneration Structure (as amended from time to time) which incorporates the Employer’s Basic Cost Responsibility remuneration packaging system or any other remuneration packaging system which replaces it (‘BCR’).
Under the current remuneration packaging system, your BCR represents the total cost of your employment to the Employer. In addition to your annual salary component, your BCR includes all charges, benefits and other costs associated with your employment (collectively, the 'Costs') including, for example, the Employer's superannuation contributions payable in respect of salary, fringe benefits tax, payroll tax, salary continuance insurance premiums, workers' compensation insurance premiums, and goods and services tax (where applicable).
The Employer will adjust the annual salary component of your BCR to reflect changes to the Costs (or additional Costs) as necessary at any time during your employment so that your total BCR does not change. Please refer to the BCR policy for details regarding your current annual salary component.
You acknowledge and agree that payments made in satisfaction of your remuneration and other benefits provided for in this Agreement (including the annual salary component of your BCR) are all-inclusive, over-award payments and will be set off against any payment or benefit to which you may become entitled as a consequence of your employment (whether under legislation, an award or another industrial instrument) including but not limited to minimum hourly rates, allowances, overtime and penalty rates and loadings.
You will be allocated a BCR, which is a recoverable allocation against any commission earned.
If your earned commission is less than your BCR allocation at the end of the month, this shortfall will be rolled forward to the next month and offset against available net commission. To the extent that your earned commission is less than your base BCR allocation in a given Commission Year (defined below), any shortfall will be rolled forward into the following Commission Year until repaid in full. In addition any shortfall may be recovered against amounts which may be allocated to you under bonus arrangements as described in the provision of this Agreement headed "Bonus Payments".
Your BCR may also be revised and may be reduced or increased by the Employer at its discretion. Any amendment to your BCR will not constitute a variation to this Agreement. The Employer may reduce your BCR having regard to your performance levels as described in the provisions of this Agreement headed “Minimum Performance Criteria”. Your BCR may be reduced at any point throughout the Commission Year if it appears to the Employer that your earned commission will be less than your base BCR allocation for the Commission Year. The quantum of the reduction will be at the discretion of the Employer, however, historical revenue earnings will be considered in making this determination.
Your base monthly net salary will be paid, partly in arrears and partly in advance for the calendar month, on the Employer’s monthly payroll dates (currently the 15th day of each month) by direct deposit to your nominated bank account.
Under the Employer’s BCR, you may be eligible to package approved on-going commitments such as Motor Vehicle or Home Office Leases, Hire-Purchase arrangements and/or car parking. All packaging requests are subject to the sole consideration and approval of the Employer. Where you make such a request to package and this is approved by the Employer, you are responsible to ensure the cost of such commitments is met.
Where commission earnings are not sufficient to cover the cost of any packaged on-going commitments at the end of the Commission year the Employee commits to pay the Employer the outstanding cost of the packaged commitment(s) within 30 days of the commission year end. Should the Employee fail to do so, Employer may, in its discretion, deduct such sums from monies owing to the Employee.
The Employer may amend its remuneration packaging system (currently BCR) at any time. You acknowledge and agree that the salary packaging options made available by the Employer are a benefit to you and any change to the options available may alter your annual salary component. Any such alteration change will neither constitute a variation or a breach of this Agreement.
Please note that all information regarding remuneration is confidential and should not be disclosed.
Minimum Performance Criteria
Your minimum performance levels, including Gross Income targets, will be determined by the Employer in consultation with you and reviewed on an annual basis. It is expected that you will perform consistently at or above the determined minimum performance level.
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Termination with Notice
After any probationary period, your employment may be terminated by either party giving four weeks' notice in writing to the other. Alternatively, the Employer may make a payment to you in lieu of all or part of your notice period.
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Commission Based Remuneration Structure
The Employer's current Commission Based Remuneration Structure is comprised of the
following three elements:· Base Commission Rates;
· Base Order Charges; and
· Remuneration definitions and other definitions as outlined in Appendix A1.
Changes will be made to the overall Commission Based Remuneration Structure, or to any or all its elements at the sole discretion of the Employer.
You will be advised in advance of any proposed changes to_ the Commission Based Remuneration Structure, or to any or all of its elements, and the effective date of those changes.
For the purpose of this contract the Commission Year is defined as the period from 1 April to 31 March each year (‘Commission Year’).
…Payment of commission
Commission payments, if any, will be made monthly. All commission payments are paid in arrears and are paid according to each individual product issuer’s payment cycle.
The payment of commission is delayed to mitigate the Employer’s credit risk. Under this structure, and subject to the section of this Agreement headed "Withholding of Commission Payments", commissions will be paid no later than two months from the month in which Macquarie receives payment from the applicable product issuer.
Subject to the provisions of this Agreement, once your commission payments exceed your monthly BCR (including the cost of all packaged items), the difference between your BCR and your monthly commission payment will be paid to you less applicable taxes. Any payroll tax and workers' compensation premiums applicable to commission payments will be borne by the Employer.
Your BCR does not include superannuation contributions that the Employer is required to make in respect of any commission payments payable to you.
This means that any commissions payments earned by you are inclusive of any superannuation charge or contribution and may be subject to a deduction for the relevant superannuation charge or contribution for the purposes of the Superannuation Guarantee (Administration) Act 1992 and the Superannuation Guarantee Charge Act 1992 as amended
from time to time. The Employer will then pay the proceeds of any deduction to a complying superannuation fund or retirement savings account nominated by you.A proportion of any commission payments may be pre-elected to be credited to your BCR capacity. These payments may not be used to increase your salary/ BCR.
Monthly commission payments that are in excess of your BCR and the cost of any items your package can be allocated between the following:
· made as an Employee Superannuation Contribution; and/or
· paid as cash.
Allocation preferences must be made prior to the commencement of each financial year. As the financial year commences on 1 July of each year, allocation preferences must be made prior to that time to be effective in that financial year. Elections may not be altered for the duration of the financial year.
Withholding of Commission Payments
At all times during your employment or upon the termination of your employment for any reason, the Employer may, at its discretion, withhold any payment of any unpaid commissions
that are owing to you for any reason, including:· under the terms of the Macquarie Private Wealth Risk Management Framework;
· if your employment is terminated without the provision of notice in accordance with the provisions of this Agreement; or
· if the Employer compensates or, in the reasonable opinion of the Employer, is likely to have to compensate in the future, for any reason, a client whom you provide or provided a service to during your employment with the Employer.
You will not be paid any commissions relating to transactions involving clients serviced by you which occur during any period of gardening leave. The Employer will pay commissions according to the standard commission payment timetable, however there is no requirement on the part of the Employer to pay any outstanding commissions immediately upon termination.
Subject to the above, as soon as practicable after the termination of your employment, any commissions which have been received by Macquarie from each individual product issuer up to and including your last day in the office are payable to you to the extent they exceed:
· your BCR; or
· any amounts owing to Macquarie and/or the Employer (see Set-off provision below); or
· any amounts owing to third parties (including clients) arising from your employment.
LEAVE
Leave generally
The Employer requires you to submit a properly completed leave form for all periods of absence.
A reference to a 'year of service' is a reference to the 12 month period commencing on the commencement date of your employment (but, to the extent permitted by law, will not include periods of unpaid leave). Leave benefits will be calculated on a pro-rata basis in respect of an incomplete year of service or if at any time you work on a part time basis.
Depending on your role, you may be required to take at least two weeks of continuous leave in each year of service for risk management purposes. If at any time you work in such a role, you agree to take the required period of continuous leave annually.
Annual Leave
Full-time employees accrue four weeks' annual leave in each year of service in
accordance with applicable legislation (as varied or replaced from time to time).You are encouraged to take your annual leave as you accrue it and, except in
exceptional circumstances and as approved by the Employer, your accrued but untaken annual leave entitlements must not exceed the reasonable limits set out in
Macquarie's annual leave policy. If your accrued but untaken annual leave
entitlements do exceed these limits, to the extent permitted by law, the Employer may direct you to take annual leave.Personal/Carer’s Leave
Personal/carer’s leave is available to you in the event of personal sickness or where you have a carer’s responsibility to provide care or support for an ill member of your immediate family or household.
Employees are entitled to paid personal/carer's leave, unpaid carer’s leave in accordance with applicable legislation (as varied or replaced from time to time).
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Form Seven
Employment agreements of:
48. Anne Purvis dated 2 December 2009
49. Craig Roberts dated 22 January 2010
Extracts of remuneration clauses
Extracts of commission payment clauses
Extracts of leave entitlement clauses
REMUNERATION
Basic Cost Responsibility (BCR)
You will be remunerated under the Employer’s Commission Based Structure which incorporates the Employer’s Basic Cost Responsibility (‘BCR’) remuneration packaging system.
Your BCR represents the total cost of your employment to the Employer. In addition to your salary component, your BCR includes charges, benefits and other costs associated with your employment including, for example, the Employer’s superannuation contributions payable in respect of salary, fringe benefits tax, payroll tax, workers compensation insurance and goods and services tax (where applicable) (collectively, the ‘Costs’). The Employer will adjust the salary component of your BCR to reflect changes to the Costs (or additional Costs) as necessary at any time during your employment.
You will be allocated a BCR, which is recoverable allocation against any commission earned.
If your earned commission is less than your BCR allocation at the end of the month, this shortfall will be rolled forward to the next month and offset against available net commission. To the extent that your earned commission is less than your base BCR allocation in a given year, any shortfall will be rolled forward into the following Commission year until repaid in full. In addition any shortfall may be recovered against amounts which may be allocated to you under bonus arrangements as described in the provision of this Agreement headed "Bonus Payments".
Your BCR may also be revised and may be reduced by the Employer having regard to your performance levels as described in the Minimum Performance Criteria provisions of this Agreement. The Employer may reduce your BCR allocation at any point throughout the Commission year if it appears to the Employer that your earned commission will be less than your base BCR allocation for the year. The quantum of the reduction will be at the discretion of the Employer, however, historical revenue earnings will be considered in making this determination.
Your base monthly net salary will be paid, partly in arrears and partly in advance for the calendar month, on the Employer’s monthly payroll dates (currently the 15th day of each month) by direct deposit to your nominated bank account.
Under the Employer’s BCR plan, you are eligible to package approved on-going commitments such as Motor Vehicle or Home Office Leases, Hire-Purchase arrangements and/or car parking. All packaging requests are subject to the sole consideration and approval of the Employer. Where a request is made and approval given by the Employer to package, the Employee is responsible to ensure the cost of such commitments is met.
Where commission earnings are not sufficient to cover the cost of any packaged on-going commitments at the end of the Commission year, the Employer can recover any deficit against amounts which may be allocated to you under bonus arrangements as described in the provision of this Agreement headed "Bonus Payments."
At the end of the Commission year the Employee commits to pay the Employer the outstanding cost of the packaged commitment(s) within 30 days of the commission year end. Should the Employee fail to do so, the Employer may, in its discretion, deduct such sums from monies owing to the Employee.
Employees remunerated by BCR are generally not eligible to claim overtime or other penalty rates (including shift loading), other than where provided for under the terms of this Agreement.
You acknowledge and agree that your remuneration and other benefits are paid in satisfaction of, and are sufficient consideration for, all hours worked by you in addition to the Employer’s normal business hours.
Please note that all information regarding remuneration is confidential and should not be discussed.
Minimum Performance Criteria
Your minimum performance levels, including income targets, will be determined by the Employer in consultation with you and reviewed on an annual basis. It is expected that you will perform consistently at or above the determined minimum performance level.
Nothing in this clause shall prevent the Employer from exercising its discretion to terminate your employment for reasons including poor performance, failing to meet minimum performance levels, misconduct or breach of policy and/or regulatory requirements.
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Termination with Notice
Your employment may be terminated by either party giving four weeks' notice in writing to the other. Alternatively, the Employer may make a payment to you in lieu of all or part of
your notice period. During any notice period or where payment is made to you in lieu of notice, payment will be based on your BCR only.
…Set-off
If either during your employment or after you have left the employer:
· remuneration components have been paid to you in advance;
· leave entitlements have been taken by you in advance;
· you have not provided the requisite notice of the termination of your employment;
· you are indebted to Macquarie for any reason; or
· Macquarie must make a payment to a third party in connection with a benefit extended to you,
to the extent permitted by law, appropriate amounts may be deducted from any monies owing to you and, if there is a shortfall, you may be required by the Employer to repay the relevant amounts within one month.
…
Base Commission Structure
The current Base Commission Structure is comprised of the following three elements:
· Base Commission Rates,
· Base Order Charges, and
· Remuneration definitions and other definitions as outlined in Appendix A.
Changes will be made to the overall Base Commission Structure, or to any or all its elements at the sole discretion of the Employer.
Employees will be advised in advance of any proposed changes to the Base Commission Structure, or to any or all of its elements, and the effective date of those changes.
For the purpose of this contract the Commission year is defined as the period from 1 April to 31 March each year.
…
Payment of Commission
Commission payments, if any, will be made monthly. All commission payments will be paid in arrears.
The payment of commission is delayed to mitigate the Employer’s credit risk. Under this structure, Month 1 commission will be paid no later than Month 3, Month 2 no later than Month 4, Month 3 no later than Month 5, Month 4 no later than Month 6, Month 5 no later than Month 7 and so on and so on.
Subject to the provision of this Agreement, once your commission payments exceeds your BCR advance allocation including the cost of all packaged items, the difference between your BCR allocation and your commission payment will be paid to you less applicable taxes. Payroll tax and workers compensation charges on commission payable (i.e. commission earned less BCR allocation) will be borne by the Employer.
As above, your BCR includes most of the charges, benefits and other costs associated with your employment. It does not however include superannuation contributions that the Employer is required to make in respect of any commission payments earned by you.
Commission payments are inclusive of any superannuation charge or contribution that may apply. This means that any commission payment earned by you may be subject to a deduction for the relevant superannuation charge or contribution. The Employer will then pay the proceeds of any deduction to a complying superannuation fund or retirement savings account nominated by you.
A proportion of commission payments may be pre-elected to be credited to your BCR capacity. These payments may not be used to increase your salary/base BCR.
Monthly commission earned over and above your base BCR and the cost of your packaged items can be allocated between one or all of the following:
· Macquarie Group Staff Share Acquisition Plan (MGSSAP)
· Superannuation
· Cash
Allocation preferences must be made prior to the commencement of each financial year. As the financial year commences on 1 July of each year, allocation preferences must be made prior to that time to be effective in that financial year. Elections may not be altered for the duration of the financial year.
Withholding of Commission Payments
At all times during your employment or upon the termination of your employment for any reason, the Employer may, at its discretion, withhold any payment of any unpaid commissions that are owing to you for any reason, including:
· under the terms of the Risk Management Framework;
· if your employment is terminated without the provision of notice in accordance with the provisions of this Agreement; or
· if the Employer compensates or, in the reasonable opinion of the Employer, is likely to have to compensate in the future, for any reason, a client whom you provide or provided a service to during your employment with the Employer.
Subject to the above, all commissions for transactions booked at the time of your termination will be paid to you. The Employer will pay these commissions according to the standard commission payment table. However, there is no requirement on the part of the Employer to pay any outstanding commissions immediately upon resignation or termination.
Subject to the above, as soon as practicable after the termination of your employment all commissions attributed to you buy not yet paid up to the date on which the termination is effected, are payable to the extent they exceed:
· your BCR; or
· any amounts owing to the Employer (see Set-off provision below); or
· any amounts owing to third parties arising from your employment
LEAVE
Leave generally
The Employer requires you to submit a properly completed leave form for all periods of absence.
A reference to a ‘year of service’ is a reference to the 12 month period from the commencement date of your employment to the corresponding date in the following calendar year. Your entitlements in respect of an incomplete year of service will, where applicable, be calculated on a pro-rata basis. In addition, if at any time you work on a part time basis, your entitlement will be calculated on a pro-rata basis.
Depending on your role, you may be required to take at least two weeks of uninterrupted leave in each year of service for risk management purposes. If you work in such a role, you agree to take the period required of continuous leave annually.
Annual Leave
Full time employees accrue four weeks’ annual leave for each year of service.
You are encouraged to take your annual leave as you accrue it and, except in exceptional circumstances and as approved by the Employer, your accrued but untaken leave entitlements must not exceed the reasonable limits outlined in the Employer’s annual leave policy which is in force from time to time. If your accrued but untaken annual leave entitlements do exceed these limits, to the extent permitted by law, the Employer may direct you to take annual leave.
Personal/Carer’s Leave
Personal/Carer’s Leave is available to you in the event of personal sickness or where you have carer’s responsibility to provide care or support for an ill member of your immediate family.
Employees are entitled to paid personal/carer’s leave, unpaid carer’s leave and compassionate leave in accordance with applicable legislation.
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Form Eight
50. Employment agreement of John Marr dated 28 September 1998
Extracts of remuneration clauses
Extracts of commission payment clauses
Extracts of leave entitlement clauses
2.1 Remuneration Package
You will be employed under the Bank’s Commission Based Structure. This structure provides a base package (BCR), combined with structured commission payments. Employees remunerated under a Commission Based Structure are not eligible to claim overtime or other penalty rates.
2.2 Base Package (BCR)
Under this structure, a base package remunerated under the Bank’s Basic Cost Responsibility Plan (BCR) will be treated as an advance on commission. The BCR represents the total cost of employment inclusive of superannuation, fringe benefits tax, payroll tax, and workers compensation insurance. BCR levels are reviewed annually, and effective 1 July. To the extent that an employee does not earn enough commission to cover their base BCR in a given year, they will not be required to repay MBL, for the given year in any subsequent years, however their BCR rate will be revised and may reduce in line with Clause 2.3 below
2.3 Minimum Performance Criteria
Individual employees’ minimum performance levels will be set in consultation with the Adviser and then reviewed annually to establish levels at which an Adviser must consistently perform.
If the adviser does not meet their individual performance criteria as determined in the annual performance review and has not repaid their annual BCR advance, effective the next remuneration year the rate of BCR will reduce. In this instance where BCR was $80,000 per annum, the reduced BCR would be . $60,000 per annum. Where BCR was $60,000 the reduced BCR would be $40,000 per annum. BCR would not reduce below $40,000 per annum.
Where minimum performance criteria are not achieved formal performance counselling will commence.
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4.1 Termination of Appointment
This appointment shall continue unless terminated by either the Bank or by the employee giving 4 weeks’ notice in writing.
If an employee is over 45 years of age with not less than 2 years’ continuous service, the minimum period of notice is increased by 1 week.
If the required period of notice is not provided by the Bank, remuneration equivalent to the notice period shall accrue to the employee’s BCR. If the employee leaves without giving and working out the requisite notice, they will forfeit an amount equal to the remuneration in respect of that period. The Bank reserves the right to make payment in lieu of notice.
In the event that an employee leaves the Bank while remuneration has been paid in advance (including leave payments), amounts will be deducted from the final pay where possible or must be repaid within one month of leaving the Bank.
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2.4 Commission Structure Percentage of commission earned
This would be tiered on the following sliding basis:
• commission earned up to and including $500K - 40% of commission earned payable to broker;
• commission earned over $500K - 50% of that portion of commission earned payable to broker.
Please refer to Appendix A for a detailed description of income included in commission claims, and Appendix B for a sample calculation commission payable to a sample adviser.
…
2.6 Payment of Commission
Commission will be paid quarterly in arrears. All commission payments (as outlined in the Commission Structure) will be applied to the advanced BCR amount for the quarter, until the advanced balance is reduced to zero.
The commission year will be specified as the period 1 April in a given year to the following 31 March.
Once the BCR advance amount for the quarter has been reduced to zero, the remaining commission balance will be paid in full. Payroll tax and workers compensation charges on commission payable (minus BCR advance) will be borne by the business. Commission payments can not be credited to the individual’s BCR entitlement to provide a surplus or rollover for the subsequent year. Commission payments can not be credited to the individual’s BCR to increase the base BCR.
If any amounts remain unclaimed against the employee’s BCR advance at the end of a quarter, this deficit will be rolled forward to the next quarter. Subsequent failure to claim commission to adequately cover the BCR may lead to performance counselling and/or reduction in base BCR.
Where an employee’s employment is terminated, all commissions earned yet not claimed for the current quarter are payable (ie minus BCR advance). All commissions for the current transactions booked at the time of termination will also be paid out to the employee. The Bank will pay such commissions 14 days after the commissions have been cleared (generally the standard ASX processing time plus one working day) and the Bank is not obliged to pay these amounts immediately upon termination.
…3.1 Annual Leave
Annual Leave will be accrued at the BCR rate of pay.
Employees are entitled to four weeks annual leave each year, and it is a stipulation of the Bank’s insurance contract that employees take at least two weeks of uninterrupted leave during every twelve month period commencing 1 July each year.
The Bank requires employees to submit a properly completed and authorised leave form for all periods of absence.
Where leave has accrued over and above four weeks the Bank may, on the giving of one month’s notice, direct an employee to take leave.
3.2 Personal/Carer’s Leave
Personal/Carer’s Leave will be accrued at the BCR rate of pay.
Employees accrue five days paid Personal/Carer’s leave in the first year of service, and eight days each year thereafter. “Year” shall mean the twelve month period from the date of appointment to the corresponding date in the following calendar year.
The Bank requires employees to submit a properly completed and authorised leave form for all periods of absence. Where Personal/Carer’s leave is taken in excess of two consecutive days, a doctor’s certificate must accompany the leave form.
…
SCHEDULE OF PARTIES
NSD 88 of 2021 Appellants
Second Appellant:
NICHOLAS SANDFORD
Third Appellant
DAVID DALL
Fourth Appellant:
ANDREW DAVIES
Fifth Appellant:
ANTHONY DOYLE
Sixth Appellant:
WILLIAM EDWARDS
Seventh Appellant:
MURRAY HEWITT
Eighth Appellant:
CHARLES KAPLAN
Ninth Appellant:
MARK O’LEARY
Tenth Appellant:
JED RICHARDS
Eleventh Appellant:
JASON BALL
Twelfth Appellant:
DAVID SCHMIDT
Thirteenth Appellant:
DARRELL SEETO
Fourteenth Appellant:
TIMOTHY COOPER
Fifteenth Appellant:
MICHAEL BRIODY
Sixteenth Appellant:
MICHAEL CRONE
Seventeenth Appellant:
CARL DICKSON
Eighteenth Appellant:
ALBERTO DIMARCO
Nineteenth Appellant:
SIMON DUCKETT
Twentieth Appellant:
KEVIN DUONG
Twenty-First Appellant:
STEPHEN ELLIOTT
Twenty-Second Appellant:
RUSSELL JONES
Twenty-Third Appellant:
NICHOLAS KERR
Twenty-Fourth Appellant:
DANIEL LEWKOWICZ
Twenty-Fifth Appellant:
SCOTT MACKENZIE
Twenty-Sixth Appellant:
SUHAS MAHAJAN
Twenty-Seventh Appellant:
JOHN MARR
Twenty-Eighth Appellant:
ROBERT MCLEAN
Twenty-Ninth Appellant:
ANNE PURVIS
Thirtieth Appellant:
EMMET RYRAN
Thirty-First Appellant:
MORISE SABA
Thirty-Second Appellant:
JAMES STARR
Thirty-Third Appellant:
RICK TERPSTRA
NSD 89 of 2021 Respondents
Second Respondent:
MATTHEW BOASE
Third Respondent:
NICHOLAS SANDFORD
Fourth Respondent:
DAVID DALL
Fifth Respondent:
ANDREW DAVIES
Sixth Respondent:
ANTHONY DOYLE
Seventh Respondent:
WILLIAM EDWARDS
Eighth Respondent:
MURRAY HEWITT
Ninth Respondent:
CHARLES KAPLAN
Tenth Respondent:
MARK O’LEARY
Eleventh Respondent:
JED RICHARDS
Twelfth Respondent:
JASON BALL
Thirteenth Respondent:
DAVID SCHMIDT
Fourteenth Respondent:
DARRELL SEETO
Fifteenth Respondent:
TIMOTHY COOPER
NSD 90 of 2021 Respondents
Second Respondent:
HAMISH BLIEVERS
Third Respondent:
DAVID BURGESS
Fourth Respondent:
TIMOTHY CLARKE
Fifth Respondent:
ROGER GAMBLE
Sixth Respondent:
PETER HARRIS
Seventh Respondent:
NATHAN HASLEM
Eighth Respondent:
MICHAEL KING
Ninth Respondent:
ANDREW NAGEL
Tenth Respondent:
JEFFREY POTTER
Eleventh Respondent:
NICHOLAS PYNE
Twelfth Respondent:
CRAIG ROBERTS
Thirteenth Respondent:
NICK SMRK
Fourteenth Respondent:
EMMA TRENGOVE
Fifteenth Respondent:
JASON TURNBULL
Sixteenth Respondent:
RICHARD BARNES
NSD 91 of 2021 Respondents
Second Respondent:
MICHAEL CRONE
Third Respondent:
CARL DICKSON
Fourth Respondent:
ALBERTO DIMARCO
Fifth Respondent:
SIMON DUCKETT
Sixth Respondent:
KEVIN DUONG
Seventh Respondent:
STEPHEN ELLIOTT
Eighth Respondent:
RUSSELL JONES
Ninth Respondent:
NICHOLAS KERR
Tenth Respondent:
DANIEL LEWKOWICZ
Eleventh Respondent:
SCOTT MACKENZIE
Twelfth Respondent:
SUHAS MAHAJAN
Thirteenth Respondent:
JOHN MARR
Fourteenth Respondent:
ROBERT MCLEAN
Fifteenth Respondent:
ANNE PURVIS
Sixteenth Respondent:
EMMET RYAN
Seventeenth Respondent:
MORISE SABA
Eighteenth Respondent:
JAMES STARR
Nineteenth Respondent:
RICK TERPSTRA
NSD 92 of 2021 Appellants
Second Appellant:
HAMISH BLIEVERS
Third Appellant:
DAVID BURGESS
Fourth Appellant:
TIMOTHY CLARKE
Fifth Appellant:
ROGER GAMBLE
Sixth Appellant:
PETER HARRIS
Seventh Appellant:
NATHAN HASLEM
Eighth Appellant:
ANDREW NAGEL
Ninth Appellant:
JEFFREY POTTER
Tenth Appellant:
NICHOLAS PYNE
Eleventh Appellant:
CRAIG ROBERTS
Twelfth Appellant:
NICK SMRK
Thirteenth Appellant:
EMMA TRENGOVE
Fourteenth Appellant:
JASON TURNBULL
Fifteenth Appellant
RICHARD BARNES
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