We begin then with the ordinary meaning of "remuneration". It is defined in The Macquarie Dictionary (2nd ed, 1991) at p 1488 as:
"remuneration 1. the act of remunerating. 2. that which remunerates; reward; pay: little remuneration for his services ."
"Remunerate" is defined at p 1488 as:
"remunerate 1. to pay, recompense, or reward for work, trouble, etc 2. to yield a recompense for (work, services, etc)."
In the Compact Oxford English Dictionary (2nd ed, 1991) at p 1556 "remuneration" is defined as:
"remuneration Reward, recompense, repayment; payment, pay."
"Remunerate" is defined at p 1556 as:
"remunerate 1. To repay, requite, make some return for (services, etc). 2. To reward (a person); to pay (one) for services rendered or work done. 3. (obsolete) To give as compensation."
In R v The Postmaster-General [1876] 1 QBD 658 at 663-664 Blackburn J, with whom Quain J agreed, observed as to the word "remuneration" appearing in a statute dealing with compensation for loss of office:
"But I think the word 'remuneration' is a wider term [than 'salary'] and means a quid pro quo. If a man gives his services, whatever consideration he gets for giving his services seems to me a remuneration for them. Consequently, I think if a person was in the receipt of a payment, or in the receipt of a percentage, or any kind of payment which would not be an actual money payment, the amount he would receive annually in respect of this would be `remuneration', and consequently I think that this statute, in the early part of it, must be construed to extend not only to money payments but to any payment given as a remuneration for his services in the office."
To a similar effect, Blain J, with whom Lord Parker CJ and Melford Stevenson J agreed, in S & U Stores Ltd v Lee [1969] 1 WLR 626 said at 629 that:
"'Remuneration' is not mere payment for work done, but is what the doer expects to get as the result of the work he does in so far as what he expects to get is quantified in terms of money."
Herring CJ and Gavan Duffy J in Connally v The Victorian Railways Commissioners [1957] VR 466 at 467 commented that the ordinary meaning of the word "remuneration" appearing in workers' compensation legislation was "pay for services rendered or work done"; their Honours adopted at 468 the meaning given to the word by Lord Davey in The Midland Railway Co v Sharpe [1904] AC 349 at 351, that is:
"Now what does a man earn? He earns the sum which is the fruit of his labour; whatever he receives by way of remuneration for the services he gives, or, as Lord Macnaghten said in Abram Coal Co v Southern [1903] AC 306, a man's 'earnings' are 'the full sum for which the man is engaged to work'."
34 The Full Bench concluded at 362:
We are satisfied that in Pt 6 of Ch 2 the word [remuneration] is used in its ordinary broad sense as comprehending an employee's total package as a reward for the work performed.
35 The first limb of the test to be applied covers the extent of the consideration given by the employer. The second, and related limb refers to the performance of the employee's contract of service for which he or she is receiving recompense. To support its wide reading of what constitutes the requisite quid pro quo as that term was used in R v The Postmaster General (referred to by the Full Bench in Shead), the applicant argued that remuneration need not be restricted to money payments. In Kagan v Primus Telecommunications, the Full Bench acknowledged this proposition as good law, but also stipulated that remuneration must be given in exchange for work undertaken. The Full Bench observed at [11]:
Although the ordinary meaning of the word 'remuneration' is not confined to cash benefits, nevertheless it must involve the notion or concept of payment for services rendered or work done...remuneration may include gratuitous payments which may not be strictly contractual entitlements, nevertheless they must be payments which are referable to or arise from the performance of work, the provision of services or the carrying out of the duties of employment.
36 The contract of employment usually provides the starting point for determining remuneration: see Austek v Atsalos at [51]. However there are some contractual entitlements, such as allowances for mileage or meal breaks, that cannot amount to remuneration as they do not arise from the performance of work: see Kagan v Primus Telecommunications at [11]. It is important, in my opinion, not to overlook this second limb of the test because it operates as a significant restriction upon the defining of remuneration in Pt 6, Ch 2 of the Act.
37 Remuneration is primarily made out by establishing an obligation on the employer to reward its employee for the work done. The nature of that reward is secondary and potentially may be a false line of inquiry in determining whether a benefit enjoyed by an employee constitutes remuneration in terms of s 89 (3) of the Act.
38 The applicant strongly submitted that if remuneration could be made via non-money payments (relying upon R v The Postmaster General at 663 - 664), then non-monetary benefits should in turn be treated as remuneration for the purposes of s 89(3) of the Act. However the second proposition is not a corollary of the first, because it overlooks the requirement that remuneration be a payment for services - the second limb of the test in Shead. The Full Bench, in United Services Union, recently emphasised the importance of establishing the employer's contractual obligation to confer the benefit as part of the work bargain. In that decision, the Commission stated at [30],
Clearly, remuneration must involve the notion or concept of payment for services rendered or work done. In both Kagan and Austeck the Full Bench has focussed on the importance of an employee's entitlements under their contract of employment (although we note the reference in Kagan to gratuitous payments which may not be strictly contractual entitlements).
39 Historically, fungible commodities such as grain and rum have formed mediums of exchange by which employees were compensated for their service. More recently the Full Bench in Kagan v Primus Telecommunications held that the provision of a motor vehicle for private use can be treated as remuneration: see also Austek v Atsalos. Nevertheless, the overarching inquiry remains whether, on the facts, an employee can show a contractual entitlement to the benefit in return for the services given: see Austek v Atsalos at 155.
40 In Ardino v Count Financial, Wilcox CJ (at 55) applied similar logic in deciding that an employee must be entitled to receive a payment from the employer, or to elect to have money paid on to a third party rather than the employee, before the payment can be taken into account as "wages" that the employee was entitled to receive (for the purpose of applying s 170CD of the Industrial Relations Act 1988 (Cth)). I turn to apply these principles to each of the claims for remuneration.
Consideration
41 The issue for determination in this matter is the meaning of the word "remuneration" as it appears in s 89(3) of the Act and whether the provision of a motor vehicle, secretary, research assistant, a laboratory and equipment and the right to maintain a private medical practice qualify as part of the remuneration of the applicant.
(i) The entitlement to private use of a motor vehicle
42 It is well settled that the private use of a motor vehicle can form part of the employee's remuneration: see Austeck v Atsalos. This includes the personal benefit of using the vehicle to travel to and from work: see Ole Hostrup v Monroe Springs (Aust) Pty Ltd [1998] NSWIRComm 608. The applicant was provided with a Holden Commodore during his employment. Mr Arjonilla estimated the running costs for such a vehicle, less the employee contribution, to be $25,118 from 17 March 2005 to 8 September 2008. The Department Circular 2004/81 and Information Bulletins issued from July 2004 to April 2008 demonstrate the employee contribution over that period to be $20,297.
43 At paragraph 6.2 the Department Circular provided that:
"Employees permitted private use of a NSW Health vehicle are required to contribute at a rate determined by the Director-General from time to time."
44 In order to assess the correct contribution rate, each employee granted approval to have private use of a Departmental motor vehicle must nominate an estimated proportion of private travel. An employee may nominate an estimate of private travel either less than 15,000 kms or greater than 15,000 kms per annum. A different employee contribution rate applies depending upon the election of kilometres. The applicant did not adduce any evidence in this respect. An employee who participates in the scheme is required to pay a yearly contribution in advance at the beginning of each financial year. The circular further provides:
"Reconciliation is required on an annual basis to establish that the appropriate contribution rate has been paid, ie less than, or greater than 15,000km, and if necessary, the employee must pay the additional contribution or receive a refund as appropriate. Where it is evident during the year that an employee has nominated an inappropriate annual total kilometre level, the employee is to be contacted with a view to amending the contribution rate during the annual period so that the employee does not have to pay or receive a large adjustment at years end."
45 In this case the applicant did not lead any evidence of the actual private use of the motor vehicle prior to his termination on 17 March 2005, whether by way of logbooks or any other records. In cross-examination, the applicant gave evidence that he used the Departmental motor vehicle to travel to his house in the Blue Mountains on most weekends, as well as to go shopping and collect his children from school. In the absence of any specific evidence of the actual proportion of private use of the motor vehicle by the applicant, that is whether less than or greater than 15,000 kms per annum, I am not in a position to determine the applicant's entitlements. The respondent's case proceeded on the basis of a calculation for 15,000 kms or above. This is what led the respondent to submit that the applicant would have been required to make a contribution to the respondent in the sum of $20,297 for the period that he had not been employed. Mr Arjonilla's evidence was that the running costs of the applicant's vehicle during the period of unemployment would have been $25,118 once the employee contribution had been deducted.
46 The difficulty that I have, in view of the unsatisfactory nature of the evidence, is what allowance should be made for the business use of the vehicle. In other words, how much, if any, should be deducted from the figure of $25,118. Mr Moses submitted that there was no evidence as to the extent of private use of the vehicle. In the absence of evidence there is nothing to contradict the clear inference in the policy that the contribution for private use was an appropriate assessment of the level of private use of the motor vehicle for the purpose of determining the applicant's remuneration. The applicant has failed to rebut this inference. I therefore reject the claim that it be included as part of the applicant's remuneration for the purposes of s 89(3) of the Act.
(ii) The provision of a research assistant, secretary, laboratory and equipment
47 The test to be applied to determine this claim is whether the applicant has a contractual entitlement to receive the monetary cost of a research assistant, secretary and laboratory equipment. The provision of support staff and a laboratory was the subject of pre-contractual discussions between the applicant, Dr King and Mr Brown. In a letter to the applicant dated 8 August 1990, Mr Brown stated that each professorial position is funded to provide research and secretarial support. Clause 5.1 of the agreement between the University and the respondent dated 23 January 1989 is to the same effect. At no time did the applicant demonstrate, by way of tax returns or otherwise, the receipt of payments by which he was to fund the two staff. They remained employees engaged by the respondent under the applicant's direction. Unlike cases where the court has entertained the possibility of an employer agreeing to make payments to third parties as a way of offsetting the employee's salary, such as superannuation contributions or the payment of school fees: see McBlane v National Transport Insurance Ltd (1997) 77 IR 185 at 189-90 and Ardino v Count Financial at 55, the applicant did not retain the capacity to ultimately realise the expenditure outlaid by the respondent in employing each of the two support staff, or the purchase of laboratory equipment.
48 The applicant submitted that the provision of a research assistant, secretary and laboratory equipment conferred a personal benefit on him and, as such, should be treated as remuneration. Whilst the provision of staff and equipment, no doubt, facilitated the applicant's research work, the evidence did not support the submission that either party intended the researcher, secretary or equipment to constitute a payment in kind for the applicant's work at the Hospital.
49 In cross-examination the applicant conceded that the researcher, Dr He, was employed directly by the respondent and from time to time undertook tasks in conjunction with other laboratories. Dr Glover also gave evidence that the research undertaken at the Hospital was designed for the broader community's benefit. The applicant gave evidence of a conversation that took place with Dr King in or around June or July 1990 in which he said that he understood a trust fund had been established to support the laboratories and animal house. This evidence militates against the conclusion that these were purely personal benefits.
50 It would, therefore, in my opinion be an error of principle to characterise the benefit as a private one for the applicant alone.
51 The applicant further submitted that since the benefit of providing a research assistant and secretary are capable of being valued in monetary terms they should be treated as remuneration for the purposes of s 89(3) of the Act. The primary hurdle for the applicant is the absence of evidence, as discussed earlier in these reasons, that it was ever intended that the benefit of the support staff, laboratory equipment and animal house were to be conferred in exchange for the employee's service. Secondly, the nature of the putative benefit, being the research and secretarial services provided to the applicant, undermines the applicant's ability to quantify the value of the claim. Mr Reitano submitted that it was the cost to the employer of providing the staff that was the best measure of the benefit to the applicant. However, an alternate view would be the amount of salary the employee has forgone in securing the benefit: see Ardino v Count Financial at 55; or, in the unique case of research, value may be found in the end product which could by far exceed the cost of employing the relevant employees. The difficulties posed in valuing such benefits illustrates a further impediment to the applicant's claim.
52 In my view, this second difficulty need not be addressed in this case, since the applicant has failed to make out that the benefit of the support staff was a quid pro quo for the applicant's work as a clinical academic. In my opinion, the applicant has failed to demonstrate that the staff possessed a commercial value and were offered as a tradeable commodity to reward the applicant for his work with the respondent. I therefore conclude that the monetary cost of providing a research assistant, secretary, laboratory and equipment and the animal house did not form part of the applicant's remuneration for the purposes of s 89(3) of the Act.
(iv) The right to a private practice
53 Similarly, for the reason already given, the applicant has not established, to my mind, that his right to private practice was offered as a reward for his services to the respondent, as required by the test for remuneration laid down in Shead and United Services Union. This claim must also fail.
54 It follows that the provision of a motor vehicle for private use, secretary, research assistant, a laboratory and equipment and the right to maintain a private medical practice do not form part of the applicant's remuneration for the purposes of s 89(3) of the Industrial Relations Act 1996.