The attached document replaces the document previously issued with the above code on 24 January 2023.

[2023] FWCFB 14

Fair Work Act 2009

s.604 - Appeal of decision

Low Latency Media Pty Ltd T/A Frameplay, Frameplay Holdings Corporation

Appeal against decision [2021] FWC 6152 of Commissioner Yilmaz at Melbourne on 28 October 2021 in the matter U2021/6369 - extension of time

[1] Low Latency Media Pty Ltd T/A Frameplay and Frameplay Holdings Corporations (the Appellant) has lodged an appeal under s.604 of the Fair Work Act 2009 (the Act) against a Decision[1] (Jurisdictional Decision) of Commissioner Yilmaz issued on 28 October 2021. This is the second appeal lodged by the Appellant against decisions made by the Commissioner in relation to an unfair dismissal application made by Mr Eric Rossi (the Respondent).

[2] In short compass, in the Jurisdictional Decision, the Commissioner found that the amount of the Respondent's earnings was below the high income threshold, notwithstanding that his contract of employment provided for an annual salary that was above the high income threshold. The Commissioner rejected arguments by the Appellant to the effect that the Respondent had at times paid himself additional amounts and that he had reduced his salary without authority, concluding that the Appellant had not made out its objection.

[3] The Commissioner proceeded to hear and determine the merits of the application. In a Decision[2] issued on 12 August 2022 (Merits Decision) the Commissioner determined that the Respondent had been unfairly dismissed and inter alia found that the Respondent had suffered a "drop in salary" in the last six months of his employment and that his salary should be "reinstated" to its former amount. An Order to give effect to the Merits Decision was also issued by the Commissioner.[3] The amount determined by the Commission for the purposes of the Order to reinstate the Respondent's salary to its former amount, was the amount in the Respondent's employment contract, which exceeds the high income threshold.

[4] On 14 August 2022, the Appellant lodged a Form F7 Notice of Appeal (Merits Appeal) against the Merits Decision. In the Notice of Appeal, the Appellant also sought a Stay of the orders made by the Commissioner which was granted on 17 August 2022 pending the determination of the Merits Appeal.[4] The Merits Appeal was listed for a hearing on 10 October 2022 in relation to permission to appeal and the merits of the appeal. On 31 August 2022, the Appellant filed an Amended Notice of Appeal in relation to the Merits Appeal, seeking to insert a new ground of appeal against the Merits Decision.

[5] In the new ground the Appellant contended that the correct pre-dismissal salary rate determined by the Commissioner exceeded the high income threshold relevant at the time of the Respondent's dismissal, thus amounting to a finding that the Commissioner lacked jurisdiction to deal with the unfair dismissal by virtue of s.382(b)(iii) of the Act. In relation to the amended ground the Appellant said:

"The Commissioner formed that opinion of the pre-dismissal annual rate of pay, so as to inform her discretion in purporting to rectify an underpayment by mistake of the parties (a step also outside of jurisdiction). The finding of a salary rate above the high income threshold can be dealt with by the Full Bench of the Commission on appeal confirming that Mr Rossi was a person not protected from unfair dismissal and falling outside of jurisdiction. To the extent necessary, and in the alternative, the Appellants seek relief by discretion of the Commission, to appeal out of time the jurisdictional finding of the Commissioner made in [2021] FWC 6152 regarding Mr Rossi's annual earnings."

[6] The Respondent opposed the insertion of this new ground of appeal on the basis that the jurisdictional objection relating to the high-income threshold had been determined by the Commissioner in the earlier Jurisdictional Decision and that no appeal had been filed by the Appellant against that Decision. On 2 September 2022, the Presiding Member caused correspondence to be forwarded to the parties indicating that in circumstances where the Appellant was essentially seeking to appeal the Jurisdictional Decision a fresh Notice of Appeal would be required to be lodged.

[7] On 7 September 2022, the Appellant lodged a separate Notice of Appeal (Jurisdictional Appeal) against the Jurisdictional Decision. The Appellant also requested that the hearing of the Merits Appeal be vacated to enable the appeal against the Jurisdictional Decision to be first heard and determined. The Appellant indicated that the determination of the Jurisdictional Appeal may obviate the need to continue the Merits Appeal.

[8] As the Jurisdictional Decision was issued on 28 October 2021, the prescribed 21-day period for lodging an appeal ended on 18 November 2021. This meant that the Jurisdictional Appeal was lodged almost 10 months out of time and accordingly, the appeal cannot proceed unless the Commission grants the Appellant an extension of time to file the appeal.

[9] On 9 September 2022, we communicated our decision to the parties that the hearing of the Merits Appeal would be vacated and that we would first deal with the Jurisdictional Appeal separately from the Merits Appeal. We also decided that the Merits Appeal would not proceed until the Jurisdictional Appeal was determined.

[10] Directions were issued in the Jurisdictional Appeal for the filing of submissions by both parties addressing an application for an extension of time to appeal, permission to appeal, the merits of the appeal and any application for permission to be represented at the hearing by a lawyer or paid agent. The Appellant sought, and was granted, permission to be legally represented, on the basis that the Full Bench was satisfied that it would enable the matter to be dealt with more efficiently taking into account its complexity. A hearing was conducted before the Full Bench on 10 October 2022. At the hearing, the Appellant was represented by Mr M Harmer of Harmers Workplace Lawyers and the Respondent was self-represented.

[11] The Respondent was dismissed on 2 July 2021. At the time the Respondent was dismissed, the high income threshold for the purposes of s.382(b)(iii) was $158,500.00. In the first instance jurisdictional hearing, it was not disputed that the Respondent's contract of employment provided for an annual salary of $170,000.00 inclusive of superannuation, an amount above the high income threshold. The Appellant also contended that for the 12 months prior to the termination of his employment, the Respondent had paid himself the amount of $178,917.19.

[12] The Respondent argued in those proceedings that his annual remuneration was reduced by arrangement with the Board to assist with the Appellant's cashflow, so that at the time of his dismissal, it was $140,000.00 inclusive of superannuation ($127,853.88 excluding superannuation). The Appellant contended in the first instance jurisdictional hearing that the Board decision was not put into effect and that although Respondent managed the Appellant's payments and the bank account, he had no authority to lower his annual salary and that the Respondent had been advised that there was no need to reduce his salary because funds had been raised address cashflow issues.

[13] The Commissioner commenced by setting out at paragraphs [7] - [9] the background to the Respondent's employment with the Appellant. In summary, the Respondent and his business partners founded Low Latency Media Pty Ltd T/A Frameplay (LLM), a start-up business providing advertising services in video games. The Respondent was the only Australian-based director of LLM and received remuneration as a director between December 2018 and November 2019.

[14] In 2019, the shareholding of LLM was transferred to Frameplay Holdings Corporation (Holdings Corporation), an American corporation, and LLM consequently became an Australian subsidiary wholly owned by the Holdings Corporation. Following the transfer, another co-founder of LLM, Mr Troughton, became the Chief Executive Officer of the Holdings Corporation, based in the United States, and the Respondent became employed by LLM as its Chief Technology Officer on a full-time basis.

[15] The Commissioner set out the background noting that the Respondent's employment contract provided that his remuneration comprised of $170,000.00 per year inclusive of superannuation. It was not contested that the Respondent was not paid any other additional payments such as commissions or bonus payments. The Commissioner also noted that the Respondent's contract of employment provided as follows in relation to variation:

will be of any force or effect unless agreed to in writing by both the Company and the Employee."

[16] The Commissioner noted that the evidence of the Respondent conflicted regarding the nature of payments made in 2021 and that he stated that discrepancies related to back payments for 2020, some of which had already been subject to tax treatments. The Commissioner also noted that the Appellant stated that the payments were unauthorised.

[17] The Commissioner first set out the submissions and evidence of the Appellant. At paragraph [10], the Commissioner noted the Appellant's submission that the Respondent was not protected by the unfair dismissal provisions at the time of his dismissal, because he was paid an income of $178,971.19 not including superannuation which exceeded the high-income threshold. The Commissioner went on at [13] to record that the Appellant submitted that the salary term of the Respondent's contract amounted to $153,000.00 plus superannuation of $17,000.00 and that for the 12 months prior to the termination of his employment, the Respondent paid himself $178,971.19, equating to $170,000.00 per annum, excluding superannuation.

[18] The Commissioner then set out evidence of the Appellant's witnesses noting that it was not contested that the Respondent was not required or entitled to exclusively manage the Australian finances and that as the sole director in Australia, the Respondent did not give anyone access to the bank accounts, including the Chief Financial Officer (CFO). Further evidence set out by the Commissioner given by the Chief Executive Officer (CEO) Mr Troughton, which the Commissioner observed was not tested in cross-examination, can be summarised as follows:

• While the Respondent maintained control over the Company's finances and payroll this was not agreed to by other directors;

• Mr Troughton could not direct the Respondent to hand over the function to the CFO and many discussions over the matter resulted in "aggressive retaliations" by the Respondent and management of the Respondent was difficult due to distance between Australia and the US and the closure of international borders;

• The salary prescribed by the contract ($153,000.00) was correct and the Respondent had no authority to change his salary;

• The salary sum reference in the Respondent's payslips was altered to reflect $127,853.88 net per annum from 26 January 2021 until his dismissal causing Mr Troughton to conduct a reconciliation;

• Mr Troughton maintained that the reconciliation showed that the Respondent made unauthorised payments to himself and that the Company's Bank transaction history showed that all payments to the Respondent over the 2020 - 2021 financial year amount to $126,145.22 net;

• Mr Troughton also tendered a reconciliation of all payslips for the same period amounting to the same net figure as the bank statements except for two transfers recorded in payslips of over $10,000.00;

• The payments the Respondent made to himself included unauthorised transaction descriptors and grossing up the net figure with the appropriate tax amounted to $178, 971.19.

[19] The Commissioner noted the Appellant's submission that there was uncontested evidence that the Respondent was paid $170,000 plus superannuation, then $170,000 inclusive of superannuation and in both situations the payment exceeded the high income threshold.[5] The Commissioner also noted the Appellant's submission that a third sum of $140,000 including superannuation was then introduced from February 2021, which the Appellant described as a "unilateral mistake" made by the Respondent.

[20] The Appellant also relied on the Respondent's employment contract which specified that any variation was required to meet clause H4. The Commissioner also recorded the Appellant's submission that:

"the reduction in salary as a mistake because Mr Troughton communicated that he had raised the funds necessary which voided the January 2021 Board decision to reduce co-founder salaries. Specifically, LLM submit that s.332 (1)(b) "amounts applied or dealt with in any way on the employee's behalf or as the employee directs", is relevant, and the amounts paid despite their reason were paid by Mr Rossi and were in excess of the high income threshold. Mr Troughton's evidence of his analysis of transaction history accords with the single touch payroll report to the ATO. LLM say the sum paid to Mr Rossi totals $126,145.22 net of tax, or gross earnings received of $178,971.19."

[21] The Commissioner then set out the Respondent's evidence and submissions, which can be summarised as follows. The Respondent was a co-founder and director of the business from January 2018 and became an employee from November 2019. The Respondent attended a board meeting on 20 January 2021 at which he agreed to an amendment to his salary reducing it to $140,000.00, including superannuation. The Respondent said that the rationale for the reduction for the founders was cashflow and that he agreed to the amendment. The Respondent also tendered email communication between the Appellant's CFO and an in-house accountant.

[22] The emails which was Annexure B to Exhibit A1 in the first instance jurisdictional hearing, can be summarised as follows. The first email in the chain was sent by the Respondent's CFO Mr Li Wu, at 9.49 am on 28 January 2021 to Mr Peter Morris, the Appellant's Financial Controller and a group email address for the Board of the Appellant. It states that:

"As per board agreement, Founders pay will be revised to $140,000.00 in local currency effective Feb 1 2021.

• For AU it will be inclusive of Super.
• For US it will be inclusive of 401(k) or any retirement plans."

[23] The next email was sent by the Respondent at 9.55 am on 28 January 2021 to Mr Li Wu, Mr Peter Morris and the Board email address, requesting confirmation of the Respondent's understanding that in this pay cycle (26/1) both founders would skip pay and then from the next amount would commence being paid again but at the revised amount. Clarification is also sought as to whether the outstanding founders back pay from March, April and May 2020, still applicable given the revised amount and the plan to have that amount backpaid.

[24] Mr Morris sent the final email tendered by the Respondent at 10.49 am on 28 January 2021 which is addressed to the Respondent and copied to Mr Li Wu as follows:

As this will begin on the 1st of Feb, based on the fortnight payrun schedule, is 6 days in the next payrun. The other four days will be at the usual $170,000.00 rate?

For the last payrun, f/n ending Jan 25th, I've accrued a full wage for Eric. Should this be reversed?"

[25] The Commissioner notes the Respondent's submission that the Board decision to change the salary from January 2021 "supersedes" the contract of employment and the reduced sum was the annual salary at the time of his dismissal. It is also noted that the Respondent referred to payslips said to have been tendered by the Appellant showing an annual rate of pay of $127,853.88 excluding superannuation and stated that "the sum disputes the jurisdictional argument on the basis of high-income threshold". Further, the Commissioner notes the Respondent's submission that the Appellant's reliance on the variation term in the 2019 contract, and what the Appellant paid himself, are irrelevant considerations to the jurisdictional argument.

[26] Next the Commissioner refers to the Respondent's submission that he did not receive two net payments of $10,000.00 which were included in payslips in August 2020, but stated that the two amounts were owing to him and related to backpay and that the amounts were reflected in payslips for the reasons that tax was paid on the amounts to the ATO and the figures were relied on for tax and JobKeeper incentives. Finally, the Commissioner refers to the Respondent's submission and evidence about a single touch payroll report tendered by the Appellant in support of the jurisdictional objection as follows:

[27] In relation to the Respondent's reliance on the single touch payroll report submitted to the ATO, Mr Rossi states that he did not submit the report, that it was submitted after his dismissal on 2 July 2021 and the amount recorded as paid to him is incorrect. Mr Rossi tendered in evidence the ATO cover page of the single touch payroll report which showed it was prepared by Mr Morris and submitted on 2 July 2021.

[27] The footnote to this paragraph, refers to paragraph [25] of the Respondent's witness statement which was Exhibit A1 in the jurisdictional hearing. That paragraph and the paragraphs that precede it were as follows:

"21. I refer to Document B to Jonathon's witness statement which records my total pay for the year ending 30 June 2021 was $178,971.49. I did not prepare, sign off or submit the Single Touch Payroll Report for the period 1 July 2020 to 30 June 2021. This report was lodged after I had been dismissed and after I had been locked out of the LLM system. Attached as Annexure C is the Single Touch Payroll Report for the period 1 July 2020 to 30 June 2021 which records that it was submitted by Morris on 2 July 2021 at 11.55 am.

22. While the report says that I received $178,971.49, I note that I did not receive this amount.

23. The payroll records which are Annexure C to Jonathon's witness statement record that there were three payroll slips for myself for the periods 11 to August 2020 to 24 August 2020.

24. The first payroll slip for that date records my usual pay which I received.

25. The other two payroll slips record payments of $16,346.15 for the same period. I did not receive these payments and these amounts are still owing to me. I did not receive payment as it was determined that LLM did not have sufficient cashflow to make the payments but that the amounts would be paid to me when LLM had sufficient funds. Attached as Annexure D is a search of my bank records listing all payments received from LLM for the period 1 July 2020 to 30 June 2021."

[28] The Respondent also went on at paragraph [32] of his witness statement to say that from the pay cycle 9 February - 28 June 2021, he received his new salary of $140,000.00 per annum, inclusive of superannuation. Annexure C to the Respondent's witness statement referred to as "the Single Touch Payroll Report for the period 1 July 2020 to 30 June 2021" is a single page document which contains no reference to the Appellant and indicates that it was "Filed reported on 2 July 2021 at 11.55 am and submitted by Peter Morris on 2 July 2021 at 11.50 am". Annexure D is a list of 35 transactions from a bank account with no indication of the identity of the account holder and no indication of any other transactions or the balance after the transactions.

[29] The Commissioner went on to set out relevant legislative provisions in s.382, before turning to consider the evidence and submissions. The Commissioner summarised these in the following paragraphs:

[34] Mr Rossi was engaged under a written contract of employment that provides for an annual salary of $170,000.00 per annum inclusive of superannuation. In this matter, superannuation is not included for the purposes of 'earnings." There is no evidence of Mr Rossi's superannuation contributions not being captured by s.332(4). Further there is no evidence of additional payments made that were determined in advance such as commissions, bonus or allowance. While Mr Rossi received director fees, neither party stated that the payments constituted earnings for the purposes of s.382(b)(iii) or s.332 of the Act.

[35] Mr Rossi submits that at the time of the dismissal, his salary was below the high-income threshold due to the decision at the January 2021 Board meeting to reduce the co-founder salaries which was subsequently communicated in writing, albeit in email. However, LLM submits that the salary as provided in the contract was not amended at the direction of the Board, nor agreed to in writing as required under clause H4 of the contract of employment. It also relies on the payments made by Mr Rossi under his control to himself and submits that the additional payments made which amount to more than the high income threshold are captured by s.332(1)(b).

[30] The Commissioner notes that the Appellant relied on s.332(1)(b) of the Act and Regulation 3.05(6) in support of its submission that the Respondent's rate of annual earnings exceeded the high income threshold and went on to conclude that:

[38] It is apparent that regulation 3.05(6) does not apply to the payment of money. The regulation refers to the payment of piece rates and benefits other than payment of money. Examples captured by the regulation relates to vehicle allowance, and other benefits such as health insurance, parking costs, family related benefits paid by the employer and the like, which have been considered by Commission decisions. Regulation 3.05 (6) is intended to capture benefits which will require the Commission to estimate the real or notional value, provided all of Regulation 3.05(6) is considered because of the use of the word "and" after each subsection. It is my view that Regulation 3.05(6) does not apply in this matter.

[31] The Commissioner also went on to note that:

[39] Turning to s.332(1) of the Act, wages is identified separately in (a) and (b) relates to "amounts applied or dealt with", however earnings does not include payments made which cannot be determined in advance ((s.332(2)((a)). LLM submit that the additional payments made by Mr Rossi to himself were unauthorised, while Mr Rossi submits the payments were back pay for outstanding wages earned the previous year and tax already paid. Mr Rossi's claim for back pay was identified in the email of 28 January 2021 to all directors when he sought clarification over the adjustment to his annual rate of pay. Given the contest regarding the payments, I cannot conclude that the payments were determined in advance and captured by s.332(1)(b).

[32] After referring to Zappia v Universal Music[6] the Commissioner observed that it is necessary to establish the rate of pay at the time of the dismissal and that her decision rested on what the Respondent's annual rate of earnings at the time of his dismissal was. After noting that there was contested evidence about whether the Respondent lawfully reduced his annual rate of earnings from 8 January 2021, the Commissioner went on observe that the circumstances leading to the amendment of the salary are relevant.

[33] After referring to the fact that the Respondent had full management of the rate of pay that he paid himself and recorded in fortnightly payslips, the Commissioner again noted the Respondent's submission that at the January 2021 Board meeting, there was a discussion and agreement among the four directions (including the Respondent) that the salaries of the two co-founders of the Appellant would be reduced. The Commission notes that while it is not disputed that the meeting took place, it is disputed that the agreement to reduce salaries occurred. The Commissioner went on to set out the text of the emails sent between Mr Li Wu, Mr Morris, Board members and the Respondent on 28 January 2021, before noting Mr Troughton's evidence that the Respondent had no authority to lower his salary and alleging that relevant emails were omitted by the Respondent from the exchange on 28 January 2021. Further, Mr Troughton's evidence that he advised the Respondent after the email exchanges that while the Board had discussed the reduction if funds were not raised, he had managed to raise the funds and "we won't issue new paperwork."

[34] The Commissioner noted that Mr Troughton provided no evidence of the email exchange nor board minutes to challenge the evidence of the adjustment as reflected by the email exchange tendered by the Respondent. Further, the Commissioner noted that Mr Blake who provided a witness statement, did not include in that statement any detail of the discussion or decision at the Board meeting other than to state that the Respondent did not request an adjustment to his salary, an assertion with which the Respondent agreed. The Commissioner also noted the Respondent's evidence that Mr Troughton called the 20 January Board meeting and Mr Blake requested that the co-funder's salary be reduced and that Mr Blake made no reference to the discussion or decision regarding found salaries in his evidence. On that basis, the Commissioner concluded that the Respondent had an opportunity to counter the Respondent's evidence on this point and only provided a statement by Mr Troughton.

[35] The Commissioner also considered that the Appellant tendered 12 payslips issued to the Respondent at the reduced sum, and that based on the evidence, the Financial Controller Mr Morris accrued wages for payment, the Appellant had access to the payroll system even though the Respondent managed the payment of wages and the bank account, and payment to the Respondent at the reduced sum would have been known to the Appellant, and went on to state:

[49] LLM provided no evidence of weight to contest the decision at the Board meeting, the outcome as evidenced by the emails of 28 January 2021 and any action regarding the pay records reflecting the salary of $140,000 per annum (including superannuation) from February 2021, if in LLM's view, that the sum was incorrect. While Mr Rossi managed the payroll function, there is no evidence that the parent company was in the dark in relation to the financial records, rather the evidence is that Mr Morris accrued wages for LLM, and Mr Wu advised Mr Troughton that he was aware that Mr Rossi was paying himself initially at the rate of $170,000 plus superannuation instead of $170,000 inclusive of superannuation.

[50] LLM bears the responsibility for satisfying the Commission of its jurisdictional argument, it has failed to demonstrate that Mr Rossi's annual rate of earnings at the time of the dismissal was not less than the high-income threshold. The evidence weighs in Mr Rossi's favour that a decision to reduce salaries was made and agreed to by Mr Rossi, further the decision was actioned and remained in place until the dismissal

[36] The Commissioner went on to conclude that the Respondent's annual rate of earnings was $127,853.88 excluding superannuation and that he was a person protected from unfair dismissal and entitled to make an application. On that basis the Commissioner dismissed the jurisdictional objection. To properly understand the present appeal, it is also necessary to consider the subsequent Merits Decision issued by the Commissioner insofar as it relates to the Jurisdictional Appeal.

[37] At the merits hearing, the Respondent gave evidence on his own behalf and evidence for the Respondent was also given by Mr Morris, the Appellant's Financial Controller who had ceased employment by that time. The Merits Decision lists witnesses for the Appellant including Mr Troughton, Mr Wu and Mr Blake. Mr Troughton and Mr Blake also gave evidence at the jurisdictional hearing. The merits hearing was conducted over a five day period. The Commissioner set out the background to the formation of the Appellant Company as follows:

[7] Mr Rossi and Mr Troughton met through an online video game in 2017 and jointly founded Low Latency Media Pty Ltd (LLM). Mr Rossi, a software engineer and accredited with Engineers Australia, brought to the business his software technical skills to embed advertisements into video games. Low Latency Media was a start-up company, both Mr Rossi and Mr Troughton were business partners and co-founders when the company was incorporated in January 2018.

[8] Until his dismissal, Mr Rossi was the sole Director and an employee of Low Latency Media Pty Ltd. Mr Troughton held the role of Adviser to LLM paid as a contractor by Mr Rossi's other business, not LLM, while he resided in Australia. In July 2019 on recommendation from Mr Troughton, the full LLM shareholding was transferred into Frameplay Holdings Corporation (the Holdings Corporation), a US company. Thereafter, Mr Troughton moved to the US and assumed the roles of CEO and director of the Holdings Corporation. This change to business structure resulted in LLM becoming the Australian subsidiary of the US corporation. Mr Rossi was also the largest shareholder of the Holdings Corporation and a board member.

[9] Mr Rossi was paid director fees from LLM's inception until November 2019 but drew a salary from the business from either November or December 2018 in the position of Chief Technology Officer (CTO).

[38] Relevantly for present purposes, the evidence traversed by the Commissioner was as follows. The Respondent's evidence was that he was a co-founder of the business, had invested heavily in it both financially and with his time, took a wage cut to assist the Appellant with its finances and went without wages for prolonged periods of time while funding was sought. The Respondent was the sole Director of the Appellant's Australian subsidiary. While the Respondent was employed on a wage from around November or December 2018, no formal employment agreement was put in place until January 2021. The Respondent's evidence was that at this time, Mr Troughton gave him an employment agreement and stated it was required for investors. The Respondent also said in his evidence that he asked why the employment agreement provided for him to report to Mr Troughton and was told that this was just a formality and would not alter the working relationship. The Commissioner identified the employment agreement referred to by the Respondent as a document tendered by him as Annexure A to his witness statement marked as Exhibit 3. The Commissioner observed that the employment agreement tendered by the Respondent was electronically signed by the Respondent and witnessed by Mr Troughton, the covering letter was not signed on behalf of the Appellant and no person is identified as an authorised signatory.

[39] Mr Wu gave evidence that the Respondent made unauthorised financial transactions including deciding to back pay his own wages that were owing and had been deferred due to funds not being available and insisting on the repayment of a $100,000.00 loan where the Respondent was the personal guarantor (that loan was made to the Appellant Company). The Commissioner found at [66] that:

"...If the decisions made were "unauthorised" as stated, then for such significant financial matters one would expect that Board minutes would be produced that confirmed the Board decisions, particularly on matters concerning loan terms and conditions, matters concerning serious allegations that place the Company at risk and the status of financial liabilities. A loan of $100,000 is significant and it would be a reasonable expectation that minutes could or should have been produced. Instead, copious hours of evidence on these matters from each witness simply produced more conflicting evidence. On this specifically, I prefer on balance the evidence of Messrs Morris and Rossi; their evidence was clear, direct, and unwavering, while the same cannot be said for the evidence of Messrs Wu and Troughton. LLM rely on the evidence of Mr Rossi during the jurisdiction hearing where he made statements concerning the payment of Jobkeeper, R&D tax and PAYG tax paid. During this hearing, Mr Rossi took time to explain his evidence and any misunderstanding at the jurisdiction hearing. Mr Morris corroborated the evidence."

[40] In summary, the evidence of the Respondent and Mr Morris before the Commissioner was that the Appellant was experiencing financial issues as early as January 2020 and executives were the first to have their pay delayed, to ensure employees could be paid first. From around this time, the Respondent was not paid for a period of four months and was then paid half his wages for a further period of two months. The same arrangement applied to Mr Wu and Mr Troughton. The Respondent and Mr Morris said the wages were payable to the Respondent for the period and that the amounts were accrued on the basis they were a liability and taxed in advance of being paid. The evidence before the Commissioner was that the Respondent was eligible for JobKeeper payments and they were claimed on his behalf, and instead of being paid to the Respondent were used to top up the wages of other employees. The Respondent also tendered evidence of the Appellant's American Xero bank transactions indicating that back payments were made to Mr Wu and Mr Troughten before back payments were made to the Respondent and the extra money Mr Blake claimed was going into the Respondent's bank account without the knowledge of the Appellant was agreed by Mr Troughton to be paid. The Commissioner rejected the Appellant's submissions in relation to this matter at paragraph [67].

[41] Mr Troughton's evidence is summarised by the Commissioner commencing at [50]. Relevantly the Commissioner said about financial matters:

[53] In relation to the $100,000 loan, Mr Troughton states it was not a personal loan taken by Mr Rossi, that instead it was a government incentive. It appears that Mr Troughton misconstrues the point made about the loan. The facts show that while the government may have encouraged banks to release three-month interest free loans, the actual loan taken by Mr Rossi on behalf of LLM through a bank was personally guaranteed by him. Mr Rossi submits that it was agreed between the Directors (Rossi and Troughton) that the loan was a temporary measure until the 2019/2020 tax return to pay wages because of cash flow issues, but the agreement was that it be repaid immediately to avert further costs. Mr Rossi tendered in evidence emails between Messrs Troughton, Rossi and Wu about the loan. No evidence was tendered from LLM to dispute Mr Rossi's account. Mr Troughton continued to assert in oral evidence that Mr Rossi had no right to insist on its repayment, despite the ramifications, that is that Mr Rossi as guarantor had secured the loan against his own assets and was personally liable in the event of default. On other matters concerning finance, Mr Troughton admitted to having access to the CBA account and probably misplaced or left behind in Australia the security token to access the Company accounts. In response to Annexure B (copies of CBA banking authority forms), Mr Troughton admitted that he had access, but he could not give Mr Wu direct authority.

[42] Relevant parts of Mr Blake's evidence and the Commissioner's observations about that evidence, were set out in point form at paragraph [99] and are that:

• Before the completion of Series A funding, it was expected and understood that the directors would have their back pay.

• In January 2021 when the Board discussed reducing Director pay, on his recollection, funding was secured so reduction of salaries was restored immediately or almost immediately. During the jurisdiction hearing it was alleged that no decision was made to reduce salaries and Mr Rossi acted on his own without authority. If it were not for the evidence produced by Mr Morris, the Commission would have been misinformed by the Respondent's evidence.

• While Mr Blake states there are minutes, at no point have any minutes been produced. However, in oral evidence Mr Bake also stated that decisions regarding back pay for the Directors, including Mr Wu occurred at executive level.

• As Chair of the Board of the Holdings Corporation, there was no evidence of regular meetings or a common accepted practice regarding minutes on important decisions.

• Given the contrasting evidence, it is reasonable to conclude that decisions were made on the go with no formality, nor formal recording of minutes and there is an absence of due diligence undertaken.

• Mr Blake also gave evidence that he delegated responsibility for correct payment of Mr Rossi's entitlements including his back pay on termination, to Mr Wu.

[43] The Commissioner then turned to consider the matters in s.387. At paragraphs [104] - [134] the Commissioner dealt with the question of whether there was a valid reason for the dismissal. After setting out the reasons for dismissal advanced in the letter notifying the Applicant of this event, and further reasons set out in submissions at the merits hearing, the Commissioner considered each of those reasons. The reasons set out in the termination letter do not include reference to financial matters. The Appellant's written submissions at the merits hearing which were referred to by the Commissioner in her consideration of this criterion, assert that at the jurisdictional hearing, the Appellant learned for the first time during cross-examination that the Respondent had deducted Pay As You Go tax from wage payments not actually made to him, so that the Appellant could benefit from the JobKeeper scheme, potentially exposing the Appellant to criminal vicarious liability. The Appellant's submissions also maintained that, as asserted in the jurisdictional hearing, the Appellant's managers had no oversight or control of the Company's accounts. The Merits Decision indicates that the Appellants also relied on their submissions in the jurisdictional hearing.

[44] The Commissioner concluded that there were no valid reasons for the Respondent's dismissal, the Respondent was not notified of the reasons for the dismissal so as to meet the requirements encompassed in s.387(b), and was not given an opportunity to respond to those reasons as required by s.387(c). The Commissioner concluded that the Respondent did not ask for a support person so that there was no unreasonable refusal and that the criterion in s.387(d) was neutral, notwithstanding her observation that there was no opportunity for the Respondent to ask for a support person as he had no way of knowing that he was to be summarily dismissed via a telephone call from Mr Troughton. In relation to s.387(e) the Commissioner was not satisfied that there were warnings where the performance or conduct was made clear or the Respondent was warned that he was at risk of dismissal should the performance or conduct not be addressed. The Commissioner dealt with ss.387(f) and (g) together and found that the Appellant is not a small business and that the size of the Appellant's business did not weigh in its favour. After considering other matters considered relevant, the Commissioner concluded that the Respondent's dismissal was harsh, unjust and unreasonable and that he had been unfairly dismissed within the meaning in s.385 of the Act.

[45] At paragraph [163] the Commissioner turned to consider remedy. After finding that reinstatement was appropriate and would be ordered, the Commissioner also decided to make orders to maintain the Respondent's continuity of employment and for remuneration lost or likely to have been lost by the person because of the dismissal. The Commissioner next identified two related matters raised by the Respondent with respect to financial loss from the dismissal. The first was described as a deduction from the Respondent's annual leave entitlements for days when it had been identified that the Respondent had an "out-of-office" message in his calendar. The Commissioner observed that some of the relevant days were outside normal business hours, public holidays or personal leave. The Commissioner concluded that there was no valid process to consider the reasons for the message and no justification for the loss of entitlements. The Commissioner said in relation to this matter: "Therefore, I order that these entitlements be reinstated at the full rate of pay prior to the reduction in Mr Rossi's salary in January 2021".

[46] The second matter concerned the evidence of Mr Blake that Directors and Mr Wu should not have suffered loss of pay, as funding was obtained and Mr Troughton's evidence in the jurisdictional hearing that he raised capital in January 2021, which negated the requirement for salaries to be dropped. The Commissioner went on to state:

"[186] For reasons unknown, this information was not conveyed to Mr Rossi and he suffered a drop in salary and this continued until his dismissal, while others did not experience any drop in salary. Interestingly, the CEO nor the CFO took any steps to correct Mr Rossi's salary. Of course, during the jurisdictional hearing it was asserted that Mr Rossi reduced his own salary without authority unbeknown to the Holdings Corporation. On this basis, I order that Mr Rossi's salary be reinstated to the rate of $86.0324 per hour and that he be reimbursed for the loss that he should not have suffered in the last six months of his employment."

[47] The Commissioner went on to award amounts to compensate the Respondent for the drop in salary for hours worked in the six-month period prior to his dismissal; wages deferred and not paid prior to the dismissal; makeup of pay to the correct rate for annual leave and annual leave deducted without cause; and superannuation on back pay and annual leave.

[48] The grounds of appeal are set out in the form of a submission appended to the Notice of Appeal as a Schedule as follows (introductory paragraphs omitted):

"The Commissioner erred by reason of the fact that on further hearing evidence in the main case which led to the Decision of the Commission on [Merits Decision] the unfair dismissal application Mr Eric Rossi v Low Latency Media T/A Frameplay [2022] FWC 2133, the Commissioner reversed her previous Decision and concluded that the correct pre-dismissal rate of earnings was in fact at a level which happens to fall above the high income threshold.

The Commissioner found that the correct pre-dismissal rate of earnings was $86.0324 per hour, plus superannuation. This amounted to a salary rate of $170,000.00 per annum, plus superannuation. That rate of earnings is in excess of the "high income threshold" relevant at the time of Mr Rossi's dismissal, thus amounting in effect to a finding that the Commissioner lacked jurisdiction to deal with the unfair dismissal application (by virtue of section 382(b)(iii), section 12; and section 333 of the Fair Work Act 2009).

The Commissioner formed that opinion of the pre-dismissal annual rate of earnings, so as to inform her discretion in purporting to rectify an underpayment by mistake of the parties (a step also outside of jurisdiction). That error is recorded at paragraphs 185 and 186 of the Decision of Commissioner Yilmaz on the Application for Unfair Dismissal remedy dated 12 August 2022 in [2022] FWC 2133.

The finding of an annual rate of earnings above the high income threshold amounts to a reversal of the Commission's Decision in the jurisdictional case [2021] FWC 6152. The Commissioner on coming to such a conclusion should have herself concluded that she lacked jurisdiction and recorded that lack of jurisdiction in her Decision of 12 August 2022 concerning the Application for Unfair Dismissal remedy [2022] FWC 2133. The failure to so correct is a failure of jurisdiction which in the respectful view of the Appellants is capable of being rectified by the amended Appeal lodged against the Decision in [2022] FWC 2133."

[49] The Appellant submits that the Full Bench of the Commission on appeal is capable of recognising the common mistake of the parties as found by the Commissioner and confirming that no jurisdiction existed for purposes of the hearing of the application for an unfair dismissal remedy.

[50] In its submissions on appeal, the Appellant said that the Commissioner in her Jurisdictional Decision outlined a debate between the parties as to whether Mr Rossi's level of income was reduced to a point below the high-income threshold. The Commissioner concluded at paragraph [50] of the Jurisdictional Decision that the Appellant, had failed to discharge its onus to establish that the Appellant's annual rate of earnings at the time of the dismissal was not less than the high-income threshold. That decision was said by the Appellant to have been based upon the extent of evidence put forward by the Appellant in that Jurisdictional Hearing.

[51] Subsequently in the Merits Decision at paragraphs [185] to [186], the Commissioner, upon hearing further evidence in the merits hearing relating to the very same issue - that is, the Respondent's actual rate of earnings at the time of dismissal, concluded that the reduction in his income to a level below the high-income threshold was, in fact, the product of a mutual mistake between the parties. According to the Respondent, the Commissioner purported at paragraphs [185] and [186] of the Merits Decision, to rectify that situation by ordering, outside of jurisdiction, that the Respondent's pay be returned to the level of $170,000 per annum plus superannuation.

[52] The essence of the appeal is that rather than concluding that her reversal of the position she reached in the Jurisdictional Decision should now result in the Merits Decision being outside of jurisdiction, the Commissioner indulged in a failure of jurisdiction by purporting to deal with the totality of the Unfair Dismissal Application, including making a series of orders outside of jurisdiction. That is at the essence of this Appeal.

[53] The Appellant submits that it is apparent from the Jurisdictional Decision that the parties differed around the impact of a January 2021 Board meeting which purported to reduce to $140,000 inclusive of superannuation the income of Mr Rossi given cash flow pressures on the business and pending further funding being available. The Commissioner in the Jurisdictional Decision under the heading "Consideration" at paragraphs [33] through to [52], traced that difference between the parties. The Commissioner noted that the Respondent, on the evidence, had full management of the rate of pay that he paid himself and recorded in fortnightly payslips (at paragraph [42] of the Jurisdictional Decision). The Commissioner further noted at paragraph [49] of the Jurisdictional Decision that, on the evidence of both Mr Li Wu, the Chief Financial Officer of the holding corporation, Frameplay Corporation, and Frameplay's CEO, Mr Jonathon Troughton, were aware that Mr Rossi had been paying himself from 2019 to 2021 at the rate of $170,000 per annum plus superannuation.

[54] The issue between the parties was the impact of the January 2021 Board meeting decision that the two co-founders, Mr Rossi and Mr Troughton, should have their salaries reduced to $140,000 per annum inclusive of superannuation (see paragraph [42] of the Jurisdictional Decision). The implementation of that January 2021 Board meeting decision was said to be contingent upon the business raising additional funding. If sufficient funding was raised to appease cash flow concerns in the business then neither of the co-founders nor other senior executives would be required to so reduce their pay. It was Mr Troughton's evidence, as CEO of Frameplay Corporation, that the Board discussed that the reductions would only occur if funds were not raised. Mr Troughton further gave evidence however that he did raise the funds and that accordingly there was no need for any reduction to occur. There was a difference in the evidence as to whether that aspect of the Board's decision had been properly passed on to the Respondent (see paragraphs [46] and [47] of the Jurisdictional Decision).

[55] The Commissioner in the Jurisdictional Decision refers to the evidence of payslips as to the quantum of income paid to Mr Rossi. Those payslips demonstrated that Mr Rossi was paid at the annual rate of $170,000 per annum plus superannuation from 2019 to 2021, and at the reduced rate of $140,000 per annum inclusive of superannuation post the January 2021 Board meeting decision. The Commissioner at paragraph [50] of the Jurisdictional Decision noted that the Appellant had failed to discharge its onus to demonstrate that the annual rate of earnings of Mr Rossi should have been at a rate higher than $140,000 per annum inclusive of superannuation. The latter amount produced an annual rate of earnings of $127,853.88 excluding superannuation as recorded at paragraph [51] of the Jurisdictional Decision.

[56] The Appellant submits that, as is evident from the transcript of the Jurisdictional Hearing, only the Respondent was cross-examined in relation to his control of the relevant rate of pay and payroll which he allocated to himself and only the Respondent gave evidence explaining what the various payments related to. None of the Appellant's witnesses were cross-examined in the jurisdictional hearing. This can be contrasted with the more detailed merits hearing where the Appellant's witnesses were cross- examined on an array of issues, including this pay level issue, during the course of which went for a number of days. Specifically Mr Troughton and Mr Blake were cross-examined on this pay issue.

[57] The Appellant submitted that it was on this basis that the Commissioner received additional evidence particularly from Mr Blake to the effect that the senior executives, Mr Troughton and the Respondent, should not have suffered a loss of pay, as the funding on which the introduction of the reduced pay was conditional, was obtained. Accordingly, at paragraphs [185] and [186] of the Merits Decision it is apparent that the Commissioner received sufficient evidence to be satisfied that the higher pay level of $170,000 per annum plus superannuation paid from 2019 to 2021 should have in fact continued to the date of dismissal. It is in that context that at paragraphs [185] and [186] of the Merits Decision that the Commissioner purports to exercise a non-existent jurisdiction to restore that higher level of pay to the Respondent.

[58] The Appellant also submitted that the Commissioner appears to accept that the payment of the lower pay level, accepted by the Commissioner at the Jurisdictional Hearing, was the product of a mutual mistake between the parties. The Commissioner in purporting at paragraph [185] and [186] of the Merits Decision to rectify that situation, in effect made a finding that the true rate of pay at the time of dismissal was above the high-income threshold. This is said to be apparent from the fact that the rate of $86.0324 per hour specified by the Commissioner at paragraph [186] of the Merits Decision, when multiplied by a 38 hour week and by 52 weeks per year, comes to a total rate of $170,000. Separately, at paragraph [186], superannuation is specified by the Commissioner over and above that rate.

[59] Further, the Appellant submits that the Full Bench of the Commission on appeal will not only be satisfied that the Commissioner made such a finding (which in effect took the Respondent outside of jurisdiction), but will further be satisfied that on the evidence, this was a proper finding given the mutual mistake of the parties as to the correct pay level of the Respondent at the time of the dismissal. The Appellant also submits that the Full Bench would be satisfied on the evidence, of the following chronology:

• The Respondent became an employee of the Appellant in 2019 without a formal written contract of employment;[7]

• In 2019, Mr Troughton and the Respondent concluded a starting salary of $170,000 per annum. Mr Troughton was based in the USA at the time and did not address the issue of superannuation outside of that agreed salary per annum;[8]

• Payslips tendered at the Jurisdictional Hearing demonstrated that Mr Rossi paid himself during 2020 and up to the end of January 2021 at the rate of $86.0324 per hour or $170,000 per annum plus superannuation;[9]

• In or about late December 2020 or early January 2021, the parties put in place a written employment contract and backdated it to January 2019[10] but regardless of the income specified on the surface of that contract at point 7 of its Schedule (being $170,000 per annum inclusive of superannuation[11]) the Respondent continued to pay himself at the rate of $170,000 per annum plus superannuation[12] and the Appellant acquiesced in that level of payment.

• A few weeks after the Respondent executed his employment contract, a Board meeting of Frameplay Corporation on 20 January 2021 decided that the income of the Respondent should be reduced, given cashflow pressures, to $140,000 per annum inclusive of superannuation subject to available funding[13];

• An email exchange between the Appellant's CFO Mr Wu and Mr Morris, the Appellant's local Accountant, indicated an understanding of a usual rate prior to that proposed change, which was $170,000 per annum plus superannuation[14];

• The proposed reduced level of the Respondent's income was subject to the business receiving funding which came through, and so the reduction in income to $140,000 per annum inclusive of superannuation was nullified[15] and the Respondent's income returned to the level it was prior to the January 2021 Board meeting[16] - i.e. $170,000 per annum plus superannuation - and it was this evidence of Mr Blake at the Merits Hearing on 8 March 2022 which the Commissioner accepted and adopted at paragraphs [185] and [186] of the Merits Decision.

[60] The Respondent submits that the purported reduction in income, the subject of the mutual mistake of the parties, was void ab initio. In contract terms, the Appellant never intended to crystallise an offer of variation to reduced income capable of acceptance by Mr Rossi. The reduced income level applied by Mr Rossi was the result of a mutual mistake. The reduced level of income was not effective at law. It either failed through lack of proper offer and acceptance or was too uncertain to form an alteration to the contract - the parties were clearly at cross purposes over the issue of reduced income.[17] The Respondent also submits that the Commission does, in appropriate circumstances, recognise that contracts can be void by mutual mistake.[18]

[61] Accordingly, the Commissioner was correct at paragraphs [185] and [186] of the Merits Decision to conclude that the mutual mistake resulted in Mr Rossi being on an income at the time of dismissal of $170,000 per annum plus superannuation. The Commissioner erred however in not also concluding that her assessment placed Mr Rossi above the high-income threshold and outside of the Unfair Dismissal Jurisdiction. The Respondent also submits that the Full Bench should conclude on the evidence, as accepted by the Commissioner, that Mr Rossi as at the date of dismissal, and by virtue of vitiating mistake, was actually on a rate of earnings in excess of the high-income threshold at the date of dismissal.

[62] In relation to whether an extension of time to appeal should be granted, the Appellant submits that the reversal of the Commissioner's finding on the face of the Merits Decision only came to the attention of the Appellants when they were able to review the Merits Decision, which was forwarded to their attention on 12 August 2022. The Appellants point to the fact that an amended notice of appeal addressing this issue was filed within 21 days of 12 August 2022 and also raised the issue in the Stay Application on Tuesday, 16 August 2022 before Deputy President Asbury. Accordingly, the Appellants have raised the issue with due expedition and within the timeline allocated for an appeal against the Merits Decision. The Appellants are however technically out of time to Appeal the Jurisdictional Decision. The Appellants seek an extension of time in accordance with Rule 56(2)(c) of the Fair Work Commission Rules 2013.

[63] The Appellant submits that it is in the public interest that permission to appeal be granted on the basis that the Jurisdictional Decision manifests an injustice, is counter intuitive and contradicted by the Merits Decision. In this regard, the Fair Work Commission is a statutory tribunal that can only act within the jurisdiction conferred by s.382(b)(iii) of the Act. For the Commission to have jurisdiction in an unfair dismissal proceeding, the Applicant must be, under s.382, a person who is "protected from unfair dismissal". One of those conditions is that the Applicant must have an annual rate of earnings less than the threshold. At the relevant time, the high-income threshold was $158,500 (exclusive of superannuation).

[64] In the Jurisdictional Decision, the Commissioner found that the Applicant fell under that threshold, but subsequently, in the Merits Decision, purported to reinstate the Applicant to a position that paid $170,000 plus superannuation, a sum which is above the high-income threshold at the relevant time. If the annual rate of earnings was above the high-income threshold, the Commission did not have jurisdiction to proceed to the merits hearing. Therefore, it is in the public interest to ensure that the Commission act within jurisdiction. Alternatively, it is in the public interest to ensure that contradictory first instance decisions of the Commission not be allowed to stand. Guidance from the Full Bench of the Commission is therefore required to resolve conflicting decisions within this matter and more broadly with respect to applications for an unfair dismissal remedy pursuant to s.394 of the Act.

[65] The Appellant also submits that it would be manifestly unjust not to rectify the error of jurisdiction and would be in the public interest in further confidence in the Commission. Failure to rectify the error would involve the Commission in purporting to sanction orders outside of jurisdiction. In the premise of contentions above, it is the Appellants' submission that on the face of the Merits Decision, the Jurisdictional Decision has sufficient doubt to warrant its reconsideration and substantial injustice will result if permission to appeal is refused in the manner expressed in Wan v Australian Industrial Relations Commission.[19] Further, it is the Appellants' submission that, among other things, the conclusions reached in the Merits Decision involved the conflation of the remedial concepts of reinstatement and compensation, and in doing so, restored the Respondent to an income level that precluded him from protection from unfair dismissal.

[66] In the oral hearing of the Jurisdictional Appeal, the Appellant submitted that in the merits hearing before the Commissioner, the Respondent used as an example of unfairness, the fact that he was on a reduced rate of pay up to the time of his dismissal and in considering that submission the Commissioner had fresh evidence which gave rise to a different conclusion being reached than the conclusion reached in the jurisdictional hearing.

[67] Mr Harmer also referred to the first instance Merits Decision and pointed out that all monetary relief awarded by the Commissioner to the Respondent was calculated on an annual salary of $170,000.00 plus superannuation. It was further submitted that at the merits hearing there was additional evidence from Mr Blake, the Chairman of the Appellant's Board, who was cross-examined by the Respondent. Traversing that evidence in submissions, Mr Harmer said that it demonstrates that there was a decision to reduce salaries of the co-founders, and that the funding came through quickly so there was no need to reduce the salaries and no decision to execute the reduction and pays would have returned to their previous levels. The evidence was also said to indicate that there was some lack of vision on the part of the US Corporation with respect to what was happening in Australia in terms of payments.

[68] In response to a proposition from the Full Bench that if the Respondent was entitled to $170,000.00 inclusive of superannuation at the time of his dismissal, that amount was below the high income threshold, Mr Harmer for the Appellant said that the Respondent had never been paid that amount and had only ever been paid $170,000.00 plus superannuation and $140,000.00 when the salary was reduced. In response to a proposition that the Appellant had never actually established that the Respondent was being paid $170,000.00 plus superannuation at the time of his dismissal, Mr Harmer said that on the Respondent's own statement in the jurisdictional hearing at first instance, he signed a contract two years after commencing employment which provided for him to be paid $170,000.00 per annum including superannuation and had been paid an amount of $170,000.00 plus superannuation up to the reduction to $140,000.00 per annum.

[69] In response to a question as to why the Full Bench should not deal with the case on the basis that if the Respondent was entitled to an amount that was higher than the $140,000.00 per annum, that entitlement should be to the amount set out in his employment contract and that the Appellant may have a claim against the Respondent on the basis that he overpaid himself, Mr Harmer said that the evidence was that the signed contract had a specific purpose, to be held up to investors but the contract is not a cap and there is nothing preventing payments being made that are in excess of a contract rate. In the present case, it was submitted by the Appellant that there had been two years of conduct at a certain level, a contract put in place to appease investors and when the contingency in relation to the funding did not eventuate, the decision to reduce salaries of the Respondent and other executives, was not enacted and the Commissioner appeared to accept the evidence of Mr Troughton in this regard.

[70] In contract law, to effect a variation of a contract term as important as remuneration, one requires a formal variation and a variation must follow the same principles as formation of the contract at first instance - offer, acceptance, intention to enter legal relations and consideration. Here, the offer of taking a reduction in pay was contingent, the funding arrived and there was thereafter no formal offer capable of acceptance. While presumably the Respondent knew that the funding came through as he was on the Board, Mr Troughton also informed the Respondent of this. It was submitted that as a matter of law, what happened was a mistake between the parties and on that basis the entitlement to $170,000.00 plus superannuation continued and this was the applicable rate of pay as was later found by the Commissioner. The Respondent had not appealed the rate of pay found by the Commissioner in the Merits Decision and did not dispute it. At that particular rate of pay and above the threshold brings jurisdictional consequences.

[71] In response to the proposition from the Full Bench that the Respondent accepted that the correct amount was $170,000.00 inclusive of superannuation, it was contended that although diverting to the contract, the Respondent had continued to pay himself $170,000.00 plus superannuation. In response to the further proposition that the Respondent paid himself $140,000.00 plus superannuation and continued to do so at the point he was dismissed, it was submitted that while the proposition was accepted, there was an anomaly because of the fact of an Australian subsidiary and US Executives and Board members who do not have vision on what is happening in Australia. In response to a question as to whether the high income threshold is calculated by reference to what a person is entitled to be paid rather than what the person is actually paid, Mr Harmer said:

"MR HARMER: Well, if I can put it this way, it's a question going to the Commissioner's jurisdiction, and if one juxtaposes this situation, if a Commission says no, the proper rate of pay is $140,000 inclusive of super and we'll adopt that for the purposes of jurisdiction. Then, Mr Rossi goes and pursues the contractual argument about what happened with a mutual mistake between the parties about a reduction, we end up with the alternative situation which is where the Commissioner ended up, whereby there's orders paying at the higher rate of pay, for purposes of relief, albeit elsewhere, but a view taken for the lower rate for purposes of a Commission jurisdiction.

In our respectful submission, the error by the Commission, with respect, which at different points in time adopted the two alternative rates, is manifest. Having come to the view that properly in the view of the Commissioner, the rate should have been as at termination $170,000 plus super, the Commission has an obligation to properly its jurisdiction and separately there's the opportunity for courts to apply a jurisdiction which may well see Mr Rossi paid at the higher rate, and that appears to appropriate at all."[20]

[72] Later, Mr Harmer submitted that the Commission should not use one rate to decide jurisdiction and another to decide relief, and in circumstances where the Respondent has not challenged the rate at which relief was calculated, and which points to a decision of the Commissioner that there was, at the date of the Respondent's dismissal, a rate above the high income threshold which has consequences for the Commission's jurisdiction. It was also submitted that just as the Commissioner formed an opinion as to what should have been the correct rate of pay to inform her decision in relation to relief, so the Full Bench can form an opinion on what as a matter of contract law, is the proper rate of pay at the date of termination. The Respondent as a result would be entitled to pursue that rate in another jurisdiction.

[73] In response to the proposition that if that course was adopted, the Respondent may be excluded from making an unfair dismissal application and be unsuccessful in a court application to obtain that rate, Mr Harmer said that the Appellant would have difficulty defending a claim by the Respondent to a court seeking to obtain the higher rate, in light of its submissions to the Commission in this appeal and that the Appellant would be estopped from contesting that higher rate in other proceedings.

[74] The Appellants submit that an extension of time should be granted, permission to appeal should be provided, the appeal should be allowed, the Jurisdictional Decision should be set aside, and that instead there should be judgment for the Appellants. The Appellants submit further that if the Full Bench allows their appeal of the Jurisdictional Decision, the Merits Decision would be set aside obviating the need to continue with the appeal in matter number C2022/5655.

[75] After setting out the background to the matter, the Respondent submitted that the Commissioner determined in the Jurisdictional Decision that the Appellant's Board met on 20 January 2021 and ordered the co-founders, the Respondent and Mr Troughton, to reduce their salaries to $140,000.00 per annum including superannuation, being a variation of their contracts. Both agreed to this request and approved the reduced salary. The Respondent was not aware or informed by the Appellant that the reduced salary was to revert to the "Employment Contract salary" upon funding being received and there was no mutual mistake or any ambivalence regarding contract terms. In this regard, the reduced salary was discussed at the Board meeting (offer) which was accepted by the Respondent. The reduction was because the Appellant was suffering cashflow issues and not yet receiving funding.

[76] In relation to the Appellant's contention of mutual mistake in relation to the salary, the Respondent said that the Commissioner at first instance rejected the proposition that he underpaid himself for unknown reasons and accepted that he had placed himself at significant financial risk to ensure the Appellant's viability. The Respondent also contended that there was email correspondence between the Respondent, the Appellant's CFO and Accountant confirming the reduced salary, tendered during the merits hearing which was contrary to the evidence of Mr Blake and Mr Troughton in relation to the jurisdictional hearing. Despite this evidence, the witnesses for the Appellant misled the Commission by arguing that the Respondent chose to unilaterally lower his salary for unknown reasons. It was also submitted by the Respondent that the Commissioner considered, and did not accept, the argument of the Appellant in relation to unilateral mistake.

[77] The Respondent maintained that he was paid the reduced salary of $140,000.00 including superannuation, for the five months prior to his dismissal, confirmed by the Respondent's payslips and bank statements. The Respondent also maintained that the Commissioner's "Wage Repayment Order" does not change the finding of fact in this respect. Further, the Respondent submitted that this Order is a separate award made by the Commissioner and should not be considered for the purposes of s.382 and does not change the earnings of the Respondent. If the Wage Repayment Order was outside the Commissioner's jurisdiction to make pursuant to s.391 of the Act, that question should be considered separately in the Second Appeal in relation to the Merits Decision and orders made pursuant to s.391.

[78] Further, if the Full Bench considers that it was open to the Commissioner to make the Wage Repayment Order, and this was to cause an issue with the jurisdiction of the Commission, the Full Bench should consider that:

• The rate of $86.0324 per hour detailed by the Commissioner does not specify if it is inclusive or exclusive of superannuation and the Commissioner only refers to superannuation being payable in relation to the additional order for payments of backpay and leave payable to the Respondent; and

• the Respondent confirmed, when cross examined during the jurisdictional hearing, that had the company board not passed a resolution for the Reduced Salary to be paid the correct salary to be adopted from January 2021 was the Employment Contract Salary of $170,000 inclusive of superannuation per annum.

[79] The Respondent contended that an employee should not lose their protection under the Act due to a salary variation that an employer may have wrongfully or wilfully withheld from an employee. If the Full Bench were to determine that the Respondent was not afforded the protection under the Act from unfair dismissal this would further detriment an employee who has been unfairly dismissed and benefit an employer who has not only misled the Commission but knowingly underpaid the Respondent. The purpose of the Act is to provide genuine unfair dismissal protections for employees with a quick, flexible and informal process.

[80] The Respondent submitted that s.382 of the Act details how the high-income threshold is to be determined. The Act provides that income is to be determined on the amount that an individual was actually paid not an amount that they may have received. The Full Bench in Zappia v Universal Music Australia Pty Limited T/A Universal Music Australia also confirmed "It is clear that the time at which the annual rate of earnings must be ascertained is at the time of the termination of the person's employment."[21] Further, the Respondent submitted that a finding that an employee would be barred from accessing the rights of unfair dismissal based upon a salary that was not actually paid to them and that they did not know was to be paid to them would be antithetical to the purposes of the Act, counter intuitive and manifestly unjust.

[81] In relation to extension of time and permission to appeal, the Respondent submitted that there are no reasonable grounds for success of the Jurisdictional Appeal and that the Commissioner made a finding of fact that there had been a Board meeting to reduce the Respondent's salary and he was paid this reduced amount at that time. It was also submitted that there had been extensive delay since the Merits Decision and the Respondent should not be disadvantaged by further delay to his reinstatement. Further, the Respondent submitted that the Commissioner found in the Merits Decision that the Appellant's witnesses had misled the Commission during the jurisdictional hearing and found that:

"In January 2021 when the Board discussed reducing Director pay, on his recollection, funding was secured so reduction of salaries was restored immediately or almost immediately. During the jurisdiction hearing it was alleged that no decision was made to reduce salaries and Mr Rossi acted on his own without authority. If it were not for the evidence produced by Mr Morris, the Commission would have been misinformed by the Respondent's evidence."[22]

[82] Reference was also made by the Respondent to other adverse findings made by the Commissioner in the Merits Decision with respect to incident reports corroborating the reasons for the Respondent's dismissal. Further, the Respondent submitted that the Jurisdictional Appeal is not in the public interest because:

• The Appeal should not be considered simply due to the Appellant having a preference for a different decision in the exercise of the Commissioner's discretion.

• The Appeal should also not be considered simply to allow the Appellant to relitigate the facts underpinning the Commissioner's decision under s.382 in the Jurisdictional Decision. As discussed above, s.400(2) of the Act imposes an additional stringent test on permission to appeal.

• The Appeal raises no issue of principle or general importance.

• The Full Bench must consider the preservation of public confidence in the administration of justice. Public confidence would be undermined by allowing an appeal that would result in a manifestly unjust outcome and is brought by an Appellant who has not only misled the Commission but also provided falsified evidence during proceedings.

[83] In oral submissions at the hearing, the Respondent clarified three matters at the outset. Firstly, the Respondent said that there was no mistake in relation to the reduction of his salary. Secondly, in relation to the issue of being paid at the rate of $170,000.00 excluding superannuation and signing a contract stating that the salary was $170,000.00 inclusive of superannuation, the Applicant said that the higher amount had been agreed orally before there was a contract in place and had changed to be inclusive of superannuation when the Respondent signed the written contract. The Respondent also pointed to the fact that in cross-examination he had been asked whether he agreed to pay himself $170,000.00 inclusive of superannuation moving forward and responded that the rate changed to $140,000.00 inclusive of superannuation but would have been $170,000.00 inclusive of superannuation, if that further change had not occurred. Thirdly, the Respondent pointed to evidence disputing the Appellant's contentions of lack of access to the Company's books and bank account and lack of vision of what was going on, and said that Mr Troughton was a signatory to the bank accounts. The Applicant also said that Mr Morris, Mr Wu, Mr Troughton and Mr Morris all had access to the Appellant's bank accounts and full oversight of what was going on.

[84] Reference was made to the evidence of Mr Troughton that he could only speculate why the Respondent lowered his salary and Mr Blake who said that the Respondent had not sent a request to the Board in relation to lowering his salary. The Respondent said that this was directly contradicted by the emails the Respondent tendered and after those emails were tendered the Appellant's witnesses filed further statements. The Respondent also pointed to the fact that during the merits hearing, Mr Blake did not respond directly to a question posed by the Respondent in cross-examination, as to whether the Respondent had been underpaid. The Respondent maintained that the facts are clear - he was paid $140,000.00 including superannuation for the five months prior to his dismissal and neither the CFO or the CEO of the Appellant made any attempt to correct this and on their own admission underpaid the Respondent.

[85] Further, the Respondent submitted that if the question of the underpayment and resulting orders was outside the Commissioner's jurisdiction, that question should be considered separately in the Merits Appeal. Further, the Respondent contended that the salary of an employee for the purpose of the high income threshold should be calculated on the amounts actually paid to an employee and it would not make sense if employers could simply contend that employees were supposed to be paid at a higher rate and were therefore excluded from the unfair dismissal provisions of the Act.

[86] The appeal is made under s.604 of the Act. There is no right of appeal and an appeal may only be made with permission of the Commission. If permission is granted, the appeal is by way of rehearing. The Commission's powers on appeal are only exercisable if there is error on the part of the primary decision-maker.[23]

[87] Section 400 of the Act applies to appeals from decisions made under the Part of the Act dealing with unfair dismissal. It provides that:

(1) Despite subsection 604(2), the FWC must not grant permission to appeal from a decision made by the FWC under this Part unless the FWC considers that it is in the public interest to do so.

(2) Despite subsection 604(1), an appeal from a decision made by the FWC in relation to a matter arising under this Part can only, to the extent that it is an appeal on a question of fact, be made on the ground that the decision involved a significant error of fact."

[88] The appeal in the present case involves an alleged error of law rather than an error of fact and accordingly, s.400(2) does not apply. By virtue of s.400(1) the Commission must not grant permission to appeal unless the Commission considers that it is in the public interest to do so. The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.[24] In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest. These considerations were that:

"... the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or they result in counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters..."[25]

[89] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error.[26] However, that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.

[90] We agree that the appeal raises questions of general importance and significance to the

Commission's unfair dismissal jurisdiction, in particular concerning the proper construction and correct application of ss.382(b)(iii) and s.332 of the Act and the approach to working out the sum of a person's annual earnings to determine whether they are less than the high income threshold. Accordingly, we are satisfied that it is in the public interest to grant permission to appeal, and we do so.

[91] As we have outlined, the circumstances which led to the present appeal are unusual. The amendment to the grounds of the Merits Appeal appeared, upon preliminary consideration, to involve a narrow point which could be efficiently disposed of by an appeal against the Jurisdictional Decision. Regrettably, when the Appellant articulated the grounds of the Jurisdictional Appeal, this was not the case, and more questions were raised by the Jurisdictional Appeal than were apparent when the initial application to amend the Merits Appeal grounds was filed.

[92] During the hearing of the Jurisdictional Appeal, we a posed questions to the Appellant including whether the sum of a person's annual rate of earnings for the purposes of s.382(b)(iii) is calculated with reference to the person's actual earnings at the time of dismissal or whether amounts the person was entitled to be paid, but was not paid at the time of dismissal, can be included in the sum. If this question is answered affirmatively, the further question arises, of when amounts can properly be said to be an entitlement that is included in the sum of a person's annual earnings to determine whether those earnings are less than the high income threshold. The impact of these issues is demonstrated in the present case. While we accept that there is no Full Bench authority directly on point, we did not receive a substantive response to those questions, and it is necessary that they be answered.

[93] It is not clear how inadvertence or mistake operates in the context of contractual entitlements for the purposes of the high income threshold. This is not a case where the Appellant has paid the Respondent an amount that prima facie exceeds the high income threshold and the issue is whether a component of that amount is excluded from the sum of annual earnings. On the Appellant's own case, it has failed to pay the Respondent an amount that it asserts he was entitled to receive, while at the same time, seeking to rely on that amount, to exclude the Respondent from accessing the protection of the legislative provisions relating to unfair dismissal.

[94] To pose a hypothetical question, what would the position of the Appellant have been if the Respondent had continued to be paid $170,000.00 exclusive of superannuation, up to the termination of his employment and then sought to argue that because he signed a contract of employment prior to the termination taking effect, stipulating that this amount was inclusive of superannuation, he was only entitled to the lesser amount and was therefore protected from unfair dismissal?

[95] The matter is further complicated by the facts in relation to the terms of the Respondent's contract of employment, which give rise to additional issues, including the relevance of the understanding of the parties to an employment contract, of amounts that are, or are not being paid, or amounts the person who is dismissed is entitled to be paid, and in what circumstances and at what point in time, such entitlements are to be assessed as included in (or excluded from) the sum of the person's annual earnings for the purpose of the high income threshold.

[96] To succeed with the Jurisdictional Appeal, the Appellant must establish that a salary amount above the high income threshold, that the Respondent was paid for a period during his employment, but that he was not actually being paid at the point he was dismissed, is included in the sum of his annual earnings within the meaning in s.382(b)(iii) of the Act. The Appellant seeks to establish this by contending that the reduction to the Respondent's salary to an amount below the high income threshold, was not effective at law because of mutual mistake and that at all times, the Respondent was entitled to be paid at the higher rate.

[97] The Appellant also contends that in the Merits Decision, the Commissioner made a finding that the Respondent's annual rate of earnings was above the high income threshold and that on making that finding, the Commissioner reversed her previous Jurisdictional Decision and erred by failing to dismiss the application at that point on the basis that the Commission did not have jurisdiction to deal with it.

[98] To determine the Jurisdictional Appeal, it is first necessary to determine whether the sum of a person's annual rate of earnings for the purposes of s.382(b)(iii) includes amounts the person is entitled to be paid and if so, on the facts in this case, whether the Respondent is entitled to be paid a salary amount that was above the high income threshold, at the point he was dismissed.

High income threshold - the construction of s.382(b)(iii)

[99] It is common ground that no modern award or enterprise agreement covers the Respondent, and that the only issue to be determined is whether the Respondent is protected from unfair dismissal by s.382(iii)(b) of the Act. To answer this question and other questions we have identified arising from the facts in this case, it is first necessary to construe s.382(b)(iii). Section 382 is in the following terms:

When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time, if at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person's annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high-income threshold.

[100] The term "earnings" is defined in ss.331(1) and (2) of the Act including for the purposes of the high income threshold (see s.333 and the definition in s.12) as follows:

(a) the employee's wages; and

(b) amounts applied or dealt with in any way on the employee's behalf or as the employee directs; and

(c) the agreed money value of non-monetary benefits; and

(d) amounts or benefits prescribed by the regulations.

(2) [Excluded amounts]

However, an employee's earnings do not include the following:

(a) payments the amount of which cannot be determined in advance;

(c) contributions to a superannuation fund to the extent that they are contributions to which subsection (4) applies;

Note: Some examples of payments covered by paragraph (a) are commissions, incentive-based payments and bonuses, and overtime (unless the overtime is guaranteed).

Non-monetary benefits are benefits other than an entitlement to a payment of money:

(a) to which the employee is entitled in return for the performance of work; and

(b) for which a reasonable money value has been agreed by the employee and the employer;

but does not include a benefit prescribed by the regulations.

(4) [Extent to which subsection applies to superannuation contributions]

This subsection applies to contributions that the employer makes to a superannuation fund to the extent that one or more of the following applies:

(a) the employer would have been liable to pay superannuation guarantee charge under the Superannuation Guarantee Charge Act 1992 in relation to the person if the amounts had not been so contributed;

(b) the employer is required to contribute to the fund for the employee's benefit in relation to a defined benefit interest (within the meaning of section 291-175 of the Income Tax Assessment Act 1997) of the employee;

(c) the employer is required to contribute to the fund for the employee's benefit under a law of the Commonwealth, a State or a Territory.

[101] Ascertaining the meaning of s.382(iii)(b) necessarily begins with the ordinary and grammatical meaning of the words used.[27] These words must be read in context by reference to the language of the Act as a whole and to the legislative purpose.[28] Section 578(a) also directs attention to the objects of the Act. Of course it must be borne in mind that the purpose or object of the Act is to be gleaned from a consideration of all of the relevant provisions of the Act.[29] Section 15AA of the Acts Interpretation Act 1901 (Cth) requires that a construction that would promote the purpose or object of the Act is to be preferred to one that would not promote that purpose or object. The purpose or object of the Act is to be taken into account even if the meaning of a provision is clear. When the purpose or object is brought into account an alternative interpretation may become apparent. If one interpretation does not promote the purpose or object of the Act, and another does, the latter interpretation is to be preferred. Section 15AA requires us to construe the Act in light of its purpose, not to rewrite it.[30]

[102] The starting point is the text of the clause. The phrase "sum of the person's annual rate of earnings" is a composite expression with a broader meaning than the annual earnings of the person who has been dismissed. That the phrase is broader than annual earnings simpliciter is also apparent from the definition of earnings in ss.332 and 333. Firstly, the definition in s.332(1) is inclusive and non-prescriptive in comparison with the exclusions in s. 332(2). The framing of the exclusion in s.332(2)(a) is restricted to payments that cannot be determined in advance. These matters indicate that the sum of the annual rate of earnings is not limited to amounts that are actually paid to the employee at the time of the dismissal and the expression is broad enough to encompass amounts to which the employee is entitled. However, the chapeau to the section makes clear that relevant amounts must be calculated with reference to the time of the dismissal. This indicates that before an amount that has not been paid at the point of dismissal can be included in the sum of the employee's earnings for the purposes of s.382(b)(iii), the amount must be one to which the employee is entitled at that point. In this regard a Full Bench of the Commission in Zappia v Universal Music Australia Pty Limited T/A Universal Music Australia[31] said that it is clear that the time at which the annual rate of earnings must be ascertained is at the time of the termination of the person's employment. What needs to be ascertained is the annual rate of earnings at that time, not the annual rate of earnings to that time (the amount earned in 12 months to that time).[32]

[103] The Full Bench also endorsed the view of the member at first instance in that case that if Parliament had intended to refer to the average amount earned over the previous 12 months it could easily have done so, and used as an example s.392 of the Act where the compensation cap is set by reference to the amount the employee received (or was entitled to) during the 26 week period prior to the dismissal.[33] We would also observe that had Parliament intended to limit the amounts used to calculate the high income threshold to amounts the employee was being paid at the time of the dismissal, the sum of a person's annual earnings to amounts the person was actually being paid at the time of the dismissal, then it could have done so by referring to the person's earnings rather than the annual sum of the person's earnings.

[104] This was the case in Priem v Priority Building Pty Ltd[34] where the Commission held that an entitlement to an annual salary increase that had not yet been actually paid by the employer, was included in remuneration for the purposes of the unfair dismissal cap. The Commissioner in that case considered that the rate of earnings was to be ascertained from the amount to which the employee was contractually entitled, regardless of whether it had been complied with by an employer. However, the facts in that case were that the employee was party to a written agreement under which his rate increased by a specified percentage on 1 July each year. The employee was dismissed on 3 July, two days after the increase would have taken effect. The Commissioner found that despite the fact that the employer had not applied the increase before dismissing the Applicant, he was entitled to the increase prior to his dismissal. The Commissioner also noted that where an amount an employee is entitled to be paid is included in the high income threshold, has not been paid, any action for enforcement and payment is a matter beyond the jurisdiction of the Commission. The Commissioner also noted in that case that the Respondent conceded the higher amount should have been paid and actually paid it.[35] While this is not determinative of jurisdiction it is an indicator whether the person who has been dismissed is entitled to the payment in question.

[105] Accordingly, we accept that amounts that have not been paid at the point an employee is dismissed may be considered as earnings for the purpose of the high income threshold, provided those amounts came within the descriptors in s.332(1) and are payments, the amount of which can be determined in advance. We are also of the view that to be included in the sum of an employee's annual earnings, amounts must be such that the entitlement of the employee to the amount is not reasonably able to be contested or is uncontested by the employer or is not contingent on an event or circumstance that is not certain. Where it is reasonably arguable that an employee is not entitled to an amount within the provisions of s.332(1), the amount is not earnings for the purposes of the high income threshold.

[106] Given that the inclusion or exclusion of amounts from the sum of an employee's earnings is determinative of whether the Commission has jurisdiction to deal with an unfair dismissal application, we do not accept that the mere fact an employer has made a concession that an amount is payable so that the employer may be estopped from denying the entitlement of the employee to the payment of the amount in a court, is sufficient to require the inclusion of the amount in the sum of the employee's annual earnings for the purposes of the high income threshold.

[107] A mutual mistake arises where both parties are mistaken, but for different reasons. Such a mistake occurs when the states of mind of the parties are different so that they intend different things. In such circumstances, their minds cannot meet in the contractual sense, and they are not "ad idem", with a result that no contract can be formed. Mutual mistake is distinct from common mistake which is a mistake shared by both parties because they make the same mistake.[36]

[108] For reasons which will become apparent, it is only necessary to consider the concept of mistake in a contract in general terms. Firstly, the effect of a mistake depends on the nature of the mistake. Generally, where the mistake is central to the contract, such that without the mistake the contract would not have existed, then the contract may be void or voidable. In the case of a mutual mistake, a contract may be unenforceable due to lack of certainty. A court will not usually declare a contract void unless it is proven that that both parties were unaware of the mistake, and it was fundamental to the contract.

[109] The Appellant has not sought to provide any further evidence in the Jurisdictional Appeal and relies on the evidence before the Commissioner in the jurisdictional and merits hearings at first instance. The Appellant asserts that the Full Bench should be satisfied on the basis of that evidence of a number of factual matters which we set out above at [59] and provides references to the evidence said to support those propositions in its submissions on the Jurisdictional Appeal. While the propositions are technically correct, our perusal of the material that was before the Commissioner indicates that relevant evidence placing these matters in context, is not referred to. There are also obvious inconsistencies in Mr Troughton's evidence on its face. When all these matters are considered, the evidence cited in the Appellant's submission does not assist its case in the Jurisdictional Appeal. We turn now to consider the propositions advanced by the Appellant.

[110] It is correct as stated in the first proposition that the evidence establishes that the Respondent became an employee of the Appellant in 2019 and that there was no formal written contract entered into at that time. The second proposition advanced by the Appellant is that Mr Troughton and the Respondent concluded a starting salary of $170,000.00 per annum and that Mr Troughton "did not address the issue of superannuation outside of that agreed salary per annum". The evidence in support of this proposition cited by the Appellant is found in Mr Troughton's witness statement which was Exhibit R1 in the jurisdictional hearing at paragraphs 20 - 22. In that statement, Mr Troughton said that the Respondent became an employee of the Appellant during a meeting in its Melbourne office. According to Mr Troughton's statement a salary of $170,000.00 was discussed but he did not consider superannuation at the time.

[111] Although Mr Troughton does not give evidence of the date of the meeting with the Respondent he stated that he finalised the Respondent's employment contract on or around 1 January 2019 and implicitly that this document reflects Mr Troughton's view of the discussion. Mr Troughton also asserts that he did not review the document again until he read it for these proceedings,[37] at this point, realised that the $170,000.00 salary was agreed to be inclusive of superannuation. He also states that "rightly or wrongly" he "always understood the [Respondent's] salary to be exclusive of superannuation" and it follows that the fact that Mr Troughton may not have looked at the contract again until these proceedings does not alter the understanding he always had.

[112] In addition, Mr Troughton referred to clause H4 of the Contract which requires that any variation to its terms be agreed in writing. Mr Troughton appended the contract of employment that he prepared on or around 1 January 2019 to his statement as Annexure A. That document is electronically signed by Mr Troughton and the Respondent, but the signatures are not dated.

[113] The Respondent's uncontested evidence about this employment contract, which he also tendered in the merits hearing, was set out in his witness statement dated 16 December 2021, as follows:

"In December 2020 Jonathan (Troughton) sent me an employment agreement and confirmed it was 'required for investors'. I queried why I was reporting to him, however he noted it was just a formality and it would not alter the current working arrangements. I signed the employment agreement as I was advised that it was urgent and it was backdated to January 2019."

[114] As he pointed out in his oral submissions, in the Merits Appeal, the Applicant was cross-examined at the first instance jurisdictional hearing about the written employment contract. In response to a question as to why he had paid himself $170,000.00 plus superannuation at various times in August 2020, the Respondent said that this was the salary he agreed with Mr Troughton. The transcript records that the Respondent was asked why it changed at the time of the contract (January 2021) to $170,000.00 inclusive of superannuation, and the Respondent said in reply:

"Because there was no contract in place and it wasn't until January that a contract was presented to me on the basis it was required for investors, and that's when it had 170 inclusive of super, January 2021."

[115] The Respondent was then asked whether he had agreed to pay himself at that rate going forward and responded by stating: then the rate changed to 140 after a board meeting." The Respondent then had the following exchange with Mr Harmer:

"MDH: Yes, but just at that time that you signed the contract, were you agreeing to reduce your rate of the 170,000.00 plus super to $170,000.00 inclusive of super. Is that what happened?

ER: Yeah it would have been correct, yes."[38]

[116] The Respondent's submissions at the jurisdictional hearing are consistent with this evidence. In this respect, the Respondent submitted that the January 2019 contract was a previous employment agreement which was superseded by the January 2021 employment agreement, and the 2021 agreement was relevant at the termination date in considering the jurisdictional issue. The Respondent also submitted that after 8 February 2021, his annual salary was reduced to $140,000.00 inclusive of superannuation and that there was no jurisdictional issue as the Respondent's earnings are below the high income threshold.[39] In our view, this evidence adds context to the assertion in proposition 4 that the Respondent continued to pay himself at the rate of $170,000.00 plus superannuation regardless of the January 2021 contract and establishes that the Respondent understood his salary would revert to $170,000.00 including superannuation upon the signing of the contract in January 2021, and that the reason this did not occur was because the reduction agreed at the Board meeting on 20 January 2021 overtook the January 2021 contract.

[117] The fifth proposition advanced by the Appellant is that a few weeks after the Respondent executed the contract in January 2021, the Appellant's board held a meeting on 20 January 2021 and decided that the Respondent's income should be reduced "given cashflow pressures, to $140,000 per annum inclusive of superannuation subject to available funding." Reference is made to the Respondent's witness statement of 29 September 2021 and the Transcript evidence of Mr Blake in the merits hearing in support of this proposition. We note that the Respondent's witness statement of 29 September does not refer to the reduction being "subject to available funding". Rather, the Respondent stated that a few weeks after he executed the contract (which occurred in January 2021), a Board meeting was scheduled to discuss, amongst a number of other issues, a reduction in the salaries of the Respondent and Mr Troughton and that at the Board meeting it was agreed, at Mr Blake's request, that the Respondent and Mr Troughton, as founders of the Company, were being paid too much and their salaries should be reduced to $140,000.00. The Respondent also records that he and Mr Troughton agreed to the reduction.[40] The Respondent tendered emails confirming this reduction. The emails indicate that they were sent to the Appellant's Board members and all witnesses for the Appellant. The emails make no mention that the reduction is temporary or contingent on funding being obtained and the $140,000.00 salary is referred to as a "revised" amount.

[118] Those emails also cast significant doubt on Mr Trouton's evidence in his 10 September 2021 witness statement, that he can only speculate why the Respondent's listed salary was changed from the pay period 26 January to 8 February onwards and that the Appellant did not authorise the reduction. Further doubt is cast on Mr Troughton's evidence by the Respondent's uncontested evidence that Mr Troughton was subject to the same pay cut in January 2021 and Mr Blake's evidence confirming that this pay cut was reversed.

[119] Mr Blake's evidence under cross-examination, was that the co-founders (the Respondent and Mr Troughton) agreed to take a reduced remuneration until funding came through and it was Mr Blake's understanding that funding came through within a few weeks or perhaps a month, "and the remuneration was returned to normal."[41] Later, Mr Blake agreed that the Respondent's salary may have reduced for a pay cycle and then "resumed to whatever it was on prior to that board meeting".[42] Mr Blake also agreed that there was nothing in Board minutes or other documentation to evidence salaries reverting to previous amounts. Further Mr Blake agreed that his evidence that the Board had not considered anything about the Respondent's intent to change his remuneration, was a reference to an allegation that the Respondent had improperly increased his remuneration to $195,000.00 rather than referring to the January 2021 reduction. While not presently relevant, this was alleged in the jurisdictional hearing and the Commissioner was ultimately satisfied that the amounts that resulted in the Respondent's remuneration increasing to that level, were backpay for a period prior to the 2021 reduction, when the Respondent had forgone his wages completely and then had been paid at 50% of his salary, to assist the Company with its cashflow during the COVID - 19 Pandemic.[43] There is evidence that the Respondent received his backpay on this occasion after Mr Li and Mr Troughton and this was confirmed by Mr Blake under cross-examination.

[120] There is no evidence that the Respondent's rate was reverted from $140,000.00 back to $170,000.00 or that he was advised that this could occur because necessary funding had been obtained. It is not in dispute that the Respondent continued to be paid at the $140,000.00 rate up to the termination of his employment. Despite the Appellant contending that the Respondent was at all times entitled to be paid $170,000.00 exclusive of superannuation, there is no satisfactory evidence that the reduction to this amount that the Appellant contends was not valid, was rectified.

[121] The email exchange tendered by the Respondent and referred to in the sixth proposition advanced by the Appellant, does not indicate an understanding of the usual rate prior to the January 2021 reduction being $170,000.00 exclusive of superannuation. Rather, the email exchange simply refers to the four days in the pay run prior to the reduction taking effect, being paid "at the usual $170,000.00 rate" which may or may not include superannuation. Given the lack of clarity associated with remuneration arrangements of the Appellant it is not clear that this email supports the Appellant's proposition. It is also notable that the Commissioner was critical of the failure of the Appellant to produce these emails and that they otherwise support the Respondent's case. In our view that criticism has some force and the reference to this aspect of the emails in the appeal seems somewhat opportunistic.

[122] Finally, without rehearsing the evidence before the Commissioner we agree that it was open for the Commissioner to find the evidence of the Appellant's witnesses about their inability to have any oversight of the Respondent's bank account unconvincing. The Respondent's evidence to the contrary was overwhelming and it is highly improbable that the CFO of a Company has no oversight over its only bank account, much less the CEO and a co-founder who did not contest the Respondent's assertion that they were entitled to give themselves access to the bank accounts.

[123] We do not consider that the Appellant's contention that at the time the Respondent was dismissed, he was entitled to an annual salary of $170,000.00 excluding superannuation, an amount above the high income threshold, is made out. Firstly, on the evidence of the Appellant's witnesses, we are of the view that there was no binding contract for the payment of that amount when employment commenced. Mr Troughton's evidence was that the oral agreement he reached with the Respondent in relation to salary and superannuation on commencement of employment, was for a salary of $170,000.00 and he did not consider the issue of superannuation outside the salary. As we have noted, it is improbable that this is the case given that Mr Troughton also said that he documented his understanding of the contract terms on 1 January 2019 in the form of a written contract which stated that the $170,000.00 salary included superannuation, and that this remained his understanding at all times. The version of the employment contract tendered by Mr Troughton is the same contract document tendered by the Applicant and signed by the Respondent and Mr Troughton in 2021, and states that the annual salary is inclusive of superannuation.

[124] The proposition that Mr Troughton did not consider superannuation outside salary in or around January 2019 is improbable, given Mr Troughton's evidence that: he drafted the contract on or around 1 January 2019; the same document was ultimately signed by the Respondent in January 2021; and the contract stated that the Respondent's salary was $170,000.00 inclusive of superannuation. Regardless, Mr Troughton's evidence of his understanding at all times, that the $170,000.00 salary included superannuation, is sufficient to establish intent on his part in relation to that matter when he drafted the contract and when it was signed by the Respondent.

[125] The fact that Mr Troughton states that he did not look again at the contract he had drafted until he was preparing for these proceedings, does not alter the fact that he must have known what he included in the contract about superannuation. This is also evidenced by the fact that Mr Troughton states that at all times, his understanding was that the $170,000.00 salary included superannuation.

[126] The Respondent's evidence is that he did not see the written contract until late 2020 or early 2021, when Mr Troughton sent it to him. There was no evidence to contradict the Respondent on this point. Prior to that point, the Applicant's understanding was that the salary excluded superannuation and he was paid accordingly. The fact that the Applicant paid himself according to his understanding of the contract, and that he oversaw the Respondent's bank account does not alter the fact that Mr Troughton and the Respondent were not ad idem over the terms of the contract they initially negotiated orally and later signed in written form. Accordingly, if the Respondent was entitled to a higher amount of annual earnings than the amount he was paid at the point he was dismissed, the entitlement was found in the contract entered into in late 2019 or early 2020, and signed by the Respondent in 2021. If the Respondent had the view that the salary excluded superannuation, he accepted that this was not the case, when he signed the contract in 2021.

[127] We also do not accept that the reduction in the Respondent's annual salary effective from January 2021, was invalid because it was not authorised and did not come into effect. The email correspondence tendered by the Respondent is completely at odds with this assertion. The emails indicate clearly that the Respondent accepted the salary decrease and the fact that Mr Troughton may not have been subjected to the decrease does not alter this fact.

[128] At best, if the agreement to reduce the Respondent's earnings to $140,000.00 inclusive of superannuation was not valid, any entitlement to be paid a higher amount was on the basis of the written contract signed in January 2021, which also provided for an annual rate of remuneration below the high income threshold. To the extent there was a mutual mistake in respect of whether salary was inclusive of superannuation, it did not totally invalidate the contract given that the Respondent worked for the Respondent under its terms. In any event, that contract was varied in January 2021 when the Respondent signed a written contract reflecting the terms he had been working under, other than salary and superannuation. The Respondent does not contend that he did not understand those terms and accepts that they would have continued to operate but for the subsequent reduction in his salary to $140,000.00 including superannuation, which was in place at the time the Respondent was dismissed.

[129] The reduction of the salary to $140,000.00 per annum including superannuation was in writing evidenced by the emails tendered by the Respondent. There is no basis to find that there was a subsisting contract of employment entitling the Respondent to be paid $170,000.00 per annum exclusive of superannuation at the point his salary was reduced to $140,000.00 including superannuation. The subsisting contract was the written contract signed in January 2021 confirming the oral agreement that was in place other than it varied the Respondent's salary and his superannuation.

[130] We do not accept that the Merits Decision in relation to the order for lost remuneration being made at the rate of $170,000.00 exclusive of superannuation, had the effect of reversing the Jurisdictional Decision or constituted a finding that the Respondent had an annual rate of earnings above the high income threshold. While there are aspects of the Merits Decision associated with the awarding of back pay and the calculation of compensation, which are arguably erroneous, that is a matter for further hearing. We are also of the view that the conclusions of the Commissioner in relation to lost remuneration, were made in the context of a decision that the Respondent was unfairly dismissed and that the reduction of the Respondent's annual salary contributed to the overall unfairness of the dismissal. It is not in effect, a finding that the Commissioner did not have jurisdiction to deal with the dismissal.

[131] For these reasons we have determined to dismiss the Jurisdictional Appeal.

[132] Permission to appeal is granted.

[133] The appeal is dismissed.

[134] A Full Bench of the Commission will proceed to determine the Merits Appeal (C2022/5655) in due course.

[135] As we have dismissed the jurisdictional objection, it will be necessary to hear and determine the Merits Appeal. The matter will be listed for Mention/Case Management/Directions before the Presiding Member in the near future. Meanwhile, we make the following observations. First, we note the evidence that that the Respondent and Mr Troughton met through playing a computer game described as a "battle royale". After reading the transcript and witness statements of the proceedings to date, we observe, that this appears to be an apt description of the current relationship between Mr Rossi on the one hand and Mr Blake, Mr Troughton and Mr Wu on the other hand.

[136] As reinstatement requires satisfaction on the part of the Commission that a constructive employment relationship can be re-established, it is arguable that this outcome will not be achieved once the matter has run its course. This is so even if the finding that the Respondent was unfairly dismissed stands.

[137] It is also arguable that there are inconsistencies in the evidence of the Appellant's witnesses which may be difficult to reconcile and problematic for them in terms of their corporate roles. Further litigation is also likely to be costly and time consuming for both parties. The Respondent is also a shareholder in the Appellant and outcomes that he is seeking in respect of his rights in that capacity may more appropriately be obtained through a court proceeding.

[138] Accordingly, it is our view that the matter may benefit from conciliation and we request the parties to correspond with the Chambers of the presiding member to indicate whether they share that view. If the parties have a view that they may benefit from conciliation, a Member Assisted Conciliation Conference will be arranged.

[1] Eric Rossi v Low Latency Media Pty Ltd T/A Frameplay [2021] FWC 6152.

[2] PR744753.

[3] PR744753.

[4] [2022] FWC 2473; PR744901.

[5] At [19] of the Jurisdictional Decision; This submission was made on the basis that the Appellant contended at first instance that the Respondent had paid himself additional amounts notwithstanding that the annual salary of $170,000.00 inclusive of superannuation results in an amount of $153,000.00 per annum excluding superannuation which was below the amount high income threshold at the time.

[6] [2012] FWAFB 6108 at [9].

[7] Mr Rossi's Witness Statement of 29 September 2021 of the Jurisdictional Hearing at paragraphs 7 and 8 - AB26-27.

[8] Exhibit R1 from the Jurisdictional Hearing at paragraphs 20 - 22 and 63 - AB27 and 31.

[9] Jurisdictional Hearing Exhibit R1 paragraph 53 and Attachment C - AB49 - 65.

[10] Mr Rossi's Witness Statement of 29 September 2021 at paragraphs 7 - 9 - AB110 - 111.

[11] Exhibit R1 at Attachment A - AB46.

[12] Exhibit R1 at Attachment C - AB 49 - 65.

[13] Witness Statement of Mr Rossi of 29 September 2021 and the Transcript Evidence of Michael Blake in the Merits Hearing at PN3632 to PN3652 - AB577 - 580.

[14] Mr Rossi's 29 September 2021 Statement at Annexure B - AB117.

[15] Transcript of merits hearing PN3638.

[17] Raffles v Wichelhaus [1864] EngR 150; (1864) 2 H & C 906; Goldsbrough Mort & Co Ltd v Quinn [1910] HCA 20; (1910) 10 CLR 674; Pacer v Westpac - Santow J - unreported - NSWSC - at 41.

[18] Ambrose v OS MCAP Pty Ltd [2022] FWC 1481 at [100].

[19] [2001] FCA 1803 at [26].

[20] Transcript of Jurisdictional Appeal - PN118 - 119.

[23] Coal and Allied Operations Pty Limited v Australian Industrial Relations Commission and Others [2000] HCA 47; (2000) 203 CLR 194 at

[24] O'Sullivan v Farrer and Another [1989] HCA 61; (1989) 168 CLR 210 at 216-217 per Mason CJ, Brennan, Dawson and Gaudron JJ;

applied in Hogan v Hinch (2011) 243 CLR 506 per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ at [69]; Coal

& Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54; (2011) 207 IR 177 at [44]- [46].

[25] [2010] FWAFB 5343; (2010) 197 IR 266 at [27].

[26] Wan v Australian Industrial Relations Commission and Another [2001] FCA 1803; (2001) 116 FCR 481 at [30].

[27] Australian Education Union v Department of Education and Children's Services (2012) 285 ALR 27 at [26].

[28] Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69].

[29] Municipal Officers' Association of Australia v Lancaster (1981) 37 ALR 559 at p. 579; Bowling v General Motors Holden Ltd [1980] FCA 143; (1980) 33 ALR 297 at 30.

[30] Mills v Meeking [1990] HCA 6; (1990) 169 CLR 214 at [235] (Dawson J); R v L (1994) 49 FCR 534 at 538.

[31] [2012] FWAFB 6108.

[34] [2013] FWC 7042.

[36] Northcott v Varsalona [2018] SADC 38 (2018) at [32].

[37] Exhibit R1 Jurisdictional Hearing paragraphs 20 - 23.

[38] Transcript of proceedings 11 October 2021, page 5 (Appeal Book page 17).

[39] Applicant's outline of submissions dated 29 September 2021 paragraphs 10 - 17 (Appeal book page 127).

[40] Exhibit R1 in jurisdictional hearing paragraphs 9 - 11.

[41] Transcript of proceedings PN3632 Appeal Book 577.

[42] Ibid at PN3639 Appeal Book page 578.

[43] Jurisdictional Decision [2021] FWC 6152 at [26]; Merits Decision [2022] FWC 2133 at [64] - [67], [154].

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